Elsevier

Information Economics and Policy

Volume 40, September 2017, Pages 21-25
Information Economics and Policy

The faster, the better? The impact of internet speed on employment

https://doi.org/10.1016/j.infoecopol.2017.06.004Get rights and content

Highlights

  • Does faster broadband generate more economic benefits than normal-speed broadband? This study examines the differential economic impacts of broadband of different speeds.

  • Utilizing the broadband availability and speed data from the National Broadband Map, a first-differenced regression analysis was conducted to investigate if faster broadband boosts employment more effectively than does slower broadband.

  • A panel of county-level data from the year 2011 to 2014 was constructed from 8 states chosen by a stratified random sampling procedure.

  • Using a first-differenced regression analysis, the study shows a positive relationship between broadband availability and county-level employment.

  • However, compared to lower-speed broadband, faster broadband did not have significantly greater effects on employment.

Abstract

Does faster broadband generate more economic benefits than normal-speed broadband? This study examines the differential economic impacts of broadband of different speeds. Utilizing the broadband availability and speed data from the National Broadband Map, a first-differenced regression analysis was conducted to investigate if faster broadband more effectively boosts the employment. The analysis shows a positive relationship between broadband availability and county-level employment. However, compared to normal-speed broadband, faster broadband did not generate greater positive effects on employment.

Section snippets

Broadband and employment

The impact of Internet or broadband availability on employment has long been recognized in the economic literature. However, the increased research on this topic only seems to have deepened the mystery, since evidence for both a significantly positive impact and non- significant, or even negative impact has been found.

A study analyzing the early years of broadband diffusion, i.e., 1998–2002, detected a significant and positive relationship between broadband deployment and growth in employment

Data and method

In order to obtain a representative sample of counties, a stratified random sampling technique was used. First, all states of the U.S. were assigned an ID number and categorized into one of the four groups: rural rich, rural poor, urban rich and urban pool. According to U.S. Census Bureau (Census), on average, 80.7% of the American population live in urban areas. Therefore, states with higher than 80.7% of the population living in urban areas were classified as urban states. In 2014, the

Results

Before the analysis, the data was tested for the existence of non-normality and outliers. After running the check, non-normality was detected. All IVs are slightly skewed, with skewness and kurtosis statistics smaller than 3. According to Kline (2016), asymmetry and kurtosis between −3 and 3 are acceptable. Also, the violation of normality assumption does not lead to biased estimates in a first-difference model, and, given a large sample size, the inferential statistics are still valid with the

Conclusion and discussions

Studies on the relationship between broadband availability/penetration and employment abound. Though many of them have shown a positive job-creating effect of the broadband, an equal amount of evidence of no significant, or even negative impact is also found. The current study utilizes the annual county-level data provided by the National Broadband Map and State Broadband Initiatives and analyzes the employment impact of broadband. As previous studies suggest, a variety of factors may impact

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