Do Students Care about School Quality? Determinants of Dropout Behavior in Developing Countries

School quality and grade completion by students are shown to be directly linked. Unique panel data on primary school–age children in Egypt permit estimation of behavioral models of school leaving that incorporate output‐based measures of school quality. With the student’s own ability and achievement held constant, a student is much less likely to remain in school if attending a low‐quality school rather than a high‐quality school. This individually rational behavior suggests that common arguments about a trade‐off between quality and access to schools may misstate the real issue and lead to public investment in too little quality.