Three out of 10 high school students who entered ninth grade did not graduate from high school with the class of 1983, making California's dropout problem more severe than the national dropout problem. Although Hispanic, black, and American Indian students drop out at a greater rate than white students, white students drop out of school in much larger numbers than do minority students. Students drop out because they are not succeeding in school, they want to work, or they are pregnant. For dropouts, opportunities are remote for earning a college degree, employment prospects are dim, unemployment is a lifelong threat, and lifetime earnings are lower than for high school graduates. Society pays a high price for the dropout in increased public dependency, increased functional illiteracy in the adult population, and a growing population of unskilled labor. School factors contributing to dropping out are inadequate student counseling and reduced course offerings in vocational education, fine arts, and other electives. Another factor contributing to dropping out is the lax enforcement of school attendance and child labor laws. Recommendations pertain to a three-part plan that would improve the enforcement of laws that would keep youth in school until age 18, improve the secondary schools to correct the factors that contribute to dropping out, and strengthen the safety net of dropout prevention and recovery programs. 26 figures, 96 references.