The release of the National Income Dynamics Study Wave 2 provides the first nationally
representative longitudinal data collected in South Africa. This makes it possible to study
transitions in and out of school, across grades and into work in ways not previously possible.
We illustrate the high levels of grade repetition evident in South African schools and show
how school completion presents a significant hurdle with very few youth successfully
completing matric. Exit from school does not offer any advantages as most youth find
themselves idle once they have left school. Our regression analysis investigates correlates of
school dropout and shows that not keeping pace is a key determinant of school dropout,
even after controlling for school quality and socioeconomic status. Those behind but
attending higher quality schools are partially protected from dropping out. Some evidence
that credit constraints may be related to dropout is found, especially among males.