The level and character of school investment affected the national economic output in agriculture and industry in Mexico during two periods, 1880-1910 and 1920-1925. Prior to the 1910 revolution, the Mexican government encouraged urban-centered industrial development, and schools were mostly locally- controlled, urban institutions. In post-revolution Mexico (1920-1925) a rural-focused strategy of agricultural development that discouraged industrial investment was adopted, and the federal government took control of schools, giving top priority to rural areas. Federal statistics on schools and economic activity in these two eras were analyzed, using production-function and panel analysis models. The level of school investment prior to the revolution was found to be negatively associated with agricultural growth, perhaps because of the urban focus of schools during this time. After 1920, school investment--now focusing on rural development--had a positive influence on agricultural output. Conflicting positive and negative effects of literacy on industry were observed prior to 1910. After 1917, however, school investment and quality raised aggregate manufacturing output. (RM)