This article by a professor of pediatrics indicates it isn't really helpful (usually). I never thought of it before, but back in the days of one room classrooms it wouldn't have been a thing at all, would it?
Repeating a grade―also known as "grade retention" ―has not been shown to help children learn.
Children won't outgrow learning and attention issues by repeating a grade. In fact, repeating a grade may contribute to long-term issues with low self-esteem, as well as emotional or social difficulties.
The American Academy of Pediatrics (AAP) believes children are most successful when they are supported to advance grade levels with their peers, when possible, while reasons behind their lack of academic progress are sorted out and addressed.
Some students may benefit from repeating a grade, at least in the short term―especially those who already have strong self-esteem and are emotionally healthy but are still having difficulty keeping up academically with their classmates. But even if students who were held back improve on standardized test scores, this doesn't appear to help their overall learning.
Repeating a grade can be considered an adverse childhood experience (ACE). Research suggests that repeating a grade, at any grade level, is associated with later high school dropout and other long-term effects. It also can affect a child's social and emotional development. In one study, sixth-grade students rated having to repeat a grade as "the most stressful life event."
In addition to academic supports and services such as extra one-on-one time with a teacher's aide, there are other alternatives to repeating a grade. One example is multi-age grouping, or mixing children from two or more grade levels in the same classroom. This way, a child stays in the same classroom with his or her friends—continues developing socially and emotionally—but receives the appropriate academic work that he or she needs. It also allows for the completion of grade-appropriate work in areas where they are capable. Other options include allowing children to repeat a failed semester instead of a full year. Extended school year or summer learning programs may also be offered in some areas.