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About 700,000 children in Mexico dropped out of school last year as recession-stricken families pushed kids to work, and a weak economic recovery will allow only slight improvement in the drop-out rate in 2010, a top education official said.

Mexico's economy suffered more than any other in Latin America last year, shrinking an estimated 7 percent due to a plunge in U.S. demand for Mexican exports such as cars.

The decline led to a 4 percent increase in the number of kids who left primary or middle school in 2009, said Juan de Dios Castro, who heads the nation's adult education program and keeps a close watch on drop-out rates.

"Poverty rose and that is a factor that makes our job more difficult," Castro told Reuters in an interview earlier this month.

Hindered by higher taxes and weak demand for its exports, Mexico's economy is seen only partially recovering this year. As a result, drop-out rates will not improve much, Castro said.

"There will be some improvement, but not significant," Castro said.

Mexicohas historically had high drop-out rates as poor families pull kids out of school to help put food on the table, and children often sell candy and crafts in the streets or work in restaurants.

The nation's drop-out problem is just the latest bad news for the long-term competitiveness of the Mexican economy. Mexico's politicians have resisted mending the country's tax, energy and labor laws for decades, leaving its economy behind countries such as Brazil and Chile.