Using data from the National Longitudinal Study of Adolescent Health (Add Health), we find that first-generation youth of Hispanic, Asian, and African heritage obtain more education than their parents, but the second generation and third or higher generations lose ground. Differences in dropout rates by race-ethnicity and immigrant generation are driven by differences in human, cultural, and social capital. Low levels of family human capital, school social capital, and community social capital place the children of immigrants at risk of dropping out. However, cultural capital and immigrant optimism buffer first-generation Hispanic youth and the children of Asian immigrants from the risk of dropping out of high school. While human and social capital resources improve with immigrant generation, cultural capital diminishes.

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