My mother started school one year ahead of schedule and I heard my grandmother admit to her decades later that it was probably a mistake. Being 17 at graduation when everyone else is 18 is not that big of a deal. Being 7 or 8 in a class of 9 year-olds can be a problem especially for boys who are often judged by their peers based on athletic ability. Taking Algebra at 13 when your classmates are 14 can be a disadvantage as well.
I was born in mid-September, 2 weeks after the cut off date. If I had turned 5 on or before September 1, I would have been expected to enter kindergarten that year. Since I turned 5 on September 14, I got an extra year of nursery school. My parents considered sending me early but ultimately decided not to do so. DEFINITELY a good call. I was probably ready academically and could have held my own in the classroom but socially and physically, I was nowhere near ready. After all, I was only 1 year removed from getting kicked out of my first pre-school and sent to a special school, where I was physically abused.
Especially for boys, I would go even farther that that. If you have a July or August baby, I would hold him back 1 year for sure. I'd even consider it if your child was born between March and June. January or February? Probably not. Studies show that summer babies are more likely to have difficulty than their slightly older peers born in the Fall or Winter.
If you have a girl, it's a little easier to start school a few months early. Athletic ability is not as crucial to making friends and many can crack the Varsity in 9th grade because puberty usually hits a little earlier. However in most cases, the rate of improvement is slower as a Sophomore-Senior. Still, I would not send a Fall baby to school early unless she shows exceptional skills but would be less inclined to hold back a summer baby.
When I was involved in the youth track club, the age group rotated year by year. In odd numbered years, I had to compete against kids born from January 1979-December 1980. In most of my races, I was either last or next to last. The worst year was 1995 when I was still in 8th grade and had to compete against some 10th graders who had already hit puberty. However, in even years, it was January 1980-December 1981. When healthy, I was in the middle of the pack. Needless to say, I had a lot more fun.
My general athletic ability was average at best but if I was 1 grade ahead, I would have been among the worst in every sport. I always did look a little younger than my actual age. Though slightly taller than average, I was very thin. The bullying that I experienced was bad enough as it was but it would have been worse with older kids. Academically, being a few months younger doesn't really matter as an upper classman. However, starting Algebra 1 in 8th grade when I hadn't yet turned 13? Even with superior math skills, I don't think I would have been ready.
As it turned out, my worst year in school was 8th grade. Because of that, I wasn't placed in advanced classes to start high school though I did move up the ranks later. That really didn't hurt me in the long run and it probably helped my confidence to excel in regular classes. Now, if my 8th grade year had been my 9th grade year, that could have been a disaster. Yes, it may have impacted my college options even if I did shape up later. When it came to Track, the class ahead of me was unusually strong and I would have barely cracked the Varsity as a Senior. Again, it was a good call to hold me back.
The downside to that is Seniors turn 19 before graduation and can mix with girls who are still 14. Such a sexual relationship is illegal and rightly so. Parents and coaches need to be vigilant in such cases. No contact outside of team activities if the age difference is more than 2 years. That's 2 years, not 2 grade levels. At least at my school, there was a rule that if you turned 19 before the start of your Senior year, you were ineligible for sports teams. I think that's fair. You're still eligible if you are 1 year behind but not 2. For 5th or even 6th year seniors, I would encourage you to stick it out and finish high school. Being 1 year older is probably not a big deal but I'd imagine that 2 years would be a little awkward at that age. Still, a diploma is more valuable to your future than a GED, which is not so easy to pass.