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Using data from the National Longitudinal Study of Adolescent Health (Add Health) this study compares if and how neighborhood effects on the likelihood to drop out and be ‘‘disconnected’’ from school and work in young adulthood change when schools are taken into account. As widely documented, I find that neighborhood socioeconomic status is associated with dropping out, but this effect is mediated by schools with high numbers of Latino or Black students. I find neighborhood socioeconomic status is not associated with being disconnected, yet, attending schools with high numbers of Black students is. This research draws attention for the need to account for neighborhood and school effects simultaneously to better understand contextual effects and to more carefully conceptualize how neighborhood and schools work together to produce these outcomes disproportionately impacting racial and ethnic minorities.