most people do a level or two lower.
One level lower is like they died and got raised. No biggie. So two levels lower is a better "punishment" for letting a character die.
Bringing 'em in at first level is fun and cool until the rest of the party passes, oh, level 5 or so. Then they're just too fragile to do much except sit back, shoot an arrow (so they have "participated" in the fight), and level up.