In traditional D&D (0-1-2E and B/X), the unstated assumption was that new PCs are made at 1st level, period, end of story. If you lose a character in campaign play, perhaps you've cultivated a henchman NPC to a higher level who can step in as the PC replacement. But if not, are you relegated to 1st level while the rest of the party is higher? On the one hand, survival seems like an issue, but on the other hand, XP may come quickly enough to rapidly advance in just a few sessions.
In the 1E AD&D DMG, Gygax included "Appendix P: Creating a Party on the Spur of the Moment", which supported random creation of party members of advanced level for those cases where it is required, "often if you attend many conventions" (p. 225). However: (a) there is no guidance given for why you'd pick one level instead of another, (b) the party is being generated simultaneously all at the same time (by level, when XP might be a better metric), and (c) the emphasis is on convention play, not for ongoing campaigns.
Probably Dave Cook in the 2E DMG has the most direct commentary on this issue (Ch. 3):
Mixing New and Old Characters
Letting players start at the beginning is fine when you first open a campaign, and all player characters can begin at the same level. As sessions are played, however, a disparity in character levels will develop. New players will join the game and old players will create new characters. Eventually, you'll reach a point where the original group of players has characters many levels higher than when they began. How, then, do you introduce new players and new player characters into your game?
There are times when you should allow a character to start above 1st level. A newly-created character should begin a campaign no higher than 4th level unless the group is very powerful. If this is the case, he should begin no higher than the lowest level character in the party (and it may be better to start a level or two lower).
3E D&D had very robust rules for creating PCs at any level (including a formalized "expected equipment" value that could be used to buy any desired magic items at game start). But again, not much guidance as to exactly what level to choose when playing with a pre-existing group.
My long-running Boston gaming group (late 90's-mid 00's) dealt with this issue, obviously, and we had a series of discussions about it. Starting briefly in 2E and then mostly playing in 3E rules, we basically used the Cook advice above: new and replacement PCs started at one level below the average of the existing party. Over time the party levels stretched out a bit (some died more than others), to something like 8th-12th level; so by the end of the campaign new PCs would be made at the 8th level, the same as the lowest-levels in the party. On the one hand this was both several levels behind the party "leaders", and yet it also caused awkwardness that the lowest-level members could commit suicide and then respawn new PCs at the same level. Also this collided with the 3E philosophy of raise dead and the like, that characters come back reduced by one level; in some cases it would actually be more profitable to create a brand-new PC at 8th level, than play the raised PC at 7th level, for example. Some of the more crunchy players might ask: What's the benefit in being raised from the dead in this case?
So what's your rule? How do you decide on the level for new and replacement PCs in a game that already has mostly high-level characters in play? We would seem to want PCs to be viable partners of the existing party, and yet we also want to motivate a high level of play (players should prefer fighting to survive, than retiring/recycling PCs and returning at the same or better level). If you use the 3E principle of raise dead return a PC at −1 level, then seemingly new PCs would have to appear at least −2 levels behind the rest of the party to make that truly beneficial. If that's unacceptable, then seemingly you would have to scrub that rule from late-era raise dead (as well as reincarnation, for example); the two issues seem to be inextricably tangled. What do you think?