Over 75 percent of the students enrolling as freshmen in Chicago's public high schools during 1978, 1979, and 1980 made up the sample for a study of the student characteristics that affected dropout rates. The characteristics assessed were reading achievement (as indicated by eighth-grade standardized test scores), age at enrollment in high school, sex, and race, as well as interactions among these variables. Loglinear and multiple regression analyses were used. Reading achievement, high school entry age, and their interactions accounted for 80 percent of the variation in dropout rates. The other 20 percent of the variation was accounted for by race and gender. High dropout rates among Hispanics and Blacks can be attributed to low reading achievement and the effects of being overage. When reading achievement and age are controlled for, Whites appear as likely to drop out as Blacks or Hispanics. Retention of students in primary grades appears to increase the dropout rate: the rate for overage students is 13 percentage points higher than that for normal-age students with identical reading scores. Dropout prevention policies should focus on raising reading scores and keeping students' ages at entry down. Studies to identify additional alterable variables should also be conducted. (PGD)