The quick answer is...nothing's changed. No new research shows that grade retention helps students.
Recent reports tell the same story. Children who are retained don't achieve more than if they were promoted.
In a 2005 study on Kindergarten retention the authors concluded that,
According to our analytic results, the average effect of the kindergarten retention policy, as compared to a policy that banned retention, was null or very small. Nor did we find any evidence that the policy would benefit those children who would be promoted if the policy were adopted. These results cast doubt on the proposition that a policy of grade retention in kindergarten would improve instruction by creating classrooms that are more homogenous in academic ability.The result is the same...and the recommendations are the same. Don't retain students. Social promotion doesn't work either, so don't promote failing students. Once more the average classroom teacher is stuck -- retention hurts the student -- or at best does not help -- and promotion doesn't really help either.
We did find evidence, however, that children who were retained would have learned more had they been promoted. This was true in both reading and math.
Hong, G. & Raudenbush, St. (2005). Effects of Kindergarten Retention Policy on Children's Cognitive Growth in Reading and MathematicsEducational Evaluation and Policy Analysis Fall 2005, Vol. 27, No. 3, pp. 205-224
The suggestions which are always made are to provide intense intervention for struggling students before they fail. With budget cuts, program and personnel reductions, finding ways to help struggling children is difficult. There's little if any funding for extra help for students.
The big push now is for more accurate referral of students for special education...tightening up the requirements and using a Response to Intervention (RtI) process which provides high quality general education instruction to children who are having trouble. The burden is more likely than not on the classroom teacher. In this time of budget cuts, class sizes are growing...in response to No Child Left Behind and Race to the Top, classroom documentation is also growing. Teachers have more to do than ever...with less support.
Intense intervention could be provided using a variety of programs. The US DOE web site, What Works Clearinghouse, has reviewed programs and graded them. Things like Reading Recovery can help, but they cost money.
Stephen Krashen, quoted in Anthony Cody's Living in Dialogue blog has a way to come up with some of the money for these and other programs.
the exit exam costs the state [California] about $600 million per year. Studies of high school exit exams show that they are useless: They do not lead to higher employment, higher earnings, or improved academic achievement. In fact, researchers have yet to discover any benefits of having a high school exit exam.$600 million a year can buy a lot of Reading Recovery teachers. At an average salary of about $50,000 a year California could afford about 12,000 Reading Recovery teachers. End the standardized testing frenzy and let's go back to teaching.