In theory, literacy can both cause growth in labor productivity and be enhanced by labor productivity. This paper utilizes the Granger causality test to estimate the predominant direction of the association between literacy and labor productivity in the manufacturing and agricultural sectors in Pakistan. The results in the paper can only be used to infer causality about particular lags in the independent variable because the data are drawn from two censuses a decade apart. With this limitation in mind, however, it appears that literacy does “cause” labor productivity to increase in the manufacturing sector.