Investigations of the linkages between improved schools and local economic development are rare. This paper considers several models that introduce human capital as a potential source of economic growth in the rural South. Results from various econometric models indicate that across the South, county per capita income growth rates from 1970 to 2000 were affected by the initial stock of human capital (percentage of adults with at least some college). The human capital influences were entered in standard growth regressions that were modified to capture spatial economic structure at the county level, thus including spatial lags and spatial error adjustments. For all nonmetro counties in the South, a standard-deviation increase in human capital stock in 1970 increased the real per capita income growth rate by 4 percent for the period 1970-2000 and 8 percent for 1980-2000. Increases in the initial human capital stock had the greatest influence on income growth in service-based counties and the least influence in mining counties. (Contains 28 references and many statistical equations and data tables) (SV)