Rural schools have had a traditional role as major vehicles of rural economic development. During the rapid economic changes of the 20th century rural schools supplied the literate migrants who flocked to the cities to become the human capital for urban based expansion. Rural schools also provided the literate farmers who stayed at home and instituted commercialized agriculture. Massive dislocations of people led to a significant depletion of capital in rural areas and a disadvantaged population of "people left behind". Now, research and policy attention is needed to redress inequities between rural and urban schools. The environment in which rural schools function has six points of differentiation from that of the city: (1) rural heterogeneity; (2) patterns of decision making or leadership in the community; (3) broader functions of the school; (4) less institutional separation within the community; (5) marked demographic and economic differences in the population; and (6) distinctive features of the rural economy. Rural schools also differ from their city counterparts as they face special problems with regard to staffing, curriculum, financing, vocational education, and the question of "best" school size. While rural schools should be an objective of rural development, they may also serve to contribute to it in a number of ways as they produce both economic and non-economic benefits to rural inhabitants. (DS)