We assess factors affecting primary and middle school dropout in rural Punjab and NorthWest Frontier Province over 6 years (1997–2004). These data are unique in a developing-country setting in longitudinally tracking changes in both school and household environments. While grade retention has improved, girls’ dropout rates remain fairly high. Results suggest the importance of both household and school factors. For girls, arrival in the family of an unwanted birth in the last 6 years and enrollment in a government (not private) primary school significantly increase the likelihood of dropout, whereas availability of post-primary schooling, having a mother who attended school, and living in a better-off household reduce the probability of dropout. For boys, school quality, measured by the percent of residential teachers in the primary school, and living in a more developed community significantly reduce the probability of dropping out; loss of household remittances significantly increases the likelihood of dropout.