Although much has been written about the ineffectiveness of schools in imparting cognitive skills, there is little reliable knowledge by which to judge such claims. While the typical school effectiveness study focuses on variation in educational outcomes between organizational units, there have been few studies which compared "school" and "non-school" populations. The purpose of this paper is to assess the contribution of formal schooling to cognitive development. Using data from the sophomore cohort of the High School and Beyond project, patterns of cognitive development for graduates and dropouts over a 2-year interval were compared. With the effects of social background, sophomore test performance, and prior academic adjustment controlled, the average difference in cognitive test performance that may be attributable to the effect of staying in school is about one-tenth of a standard deviation. Moreover, dropping out of school has its most severe negative effects upon disadvantaged students. (Author)