Several years ago, a coalition of Chicago civic groups met to determine the scope of the urban dropout problem and develop strategies for dealing with it. The resulting research program rejected both attrition and survey analysis approaches in favor of direct examination of all student records for three graduating classes (1982, 1983, and 1984) enrolled in all Chicago public high schools. Instead of treating dropout prone children as "marginal" students needing special programs, this three-part study posits schools' responsibility to provide students with the best possible education. The burden is primarily on changing schools, not the children. The first phase, examining elementary schools' contribution to the dropout problem, found that schools' success rate ranged from a 100 percent graduation rate to a 100 percent dropout rate. Below normal reading scores and the proportion of overage and poor students attending elementary school were strong dropout predictors. Surprisingly, race was not a strong factor. The second and third research phases examined causes of students' lack of preparation for high school and successful strategies for treating this problem. Using an ethnographic approach, the study ascertained that high schools emphasizing strong principal leadership, discipline and safety measures, student and teacher attendance, interactive teaching, good facilities maintenance, and cooperation between faculty and administration were successful at retaining students. Increasing time on task would most effectively improve inner-city schooling. Included are numerous tables and 10 references. (MLH)