Broadband acceleration and employment: Evidence from China

Whether increasing broadband speed promotes or impedes employment remains uncertain in literature. On the one hand, accelerating broadband creates new jobs and can reduce labour misallocation in the labour market, thus reducing unemployment. On the other hand, it might reduce traditional labour-intensive jobs, leading to higher unemployment. To investigate the relationship between broadband speed-up and employment, we utilised China Household Finance Survey data for 2013, 2015, and 2017 as the research sample. Our study finds that a 100 % increase in broadband speeds would be significantly associated with an increase of 0.332 more people employed in households. The mechanism analysis shows that broadband speed-up promotes employment by improving entrepreneurship, but the empirical results do not support the mechanism of innovation. In the cross-sectional analysis, we find that the correlation between broadband acceleration and employment is more pronounced in low-income and less-educated households. Additionally, the above correlation is more substantial for households in rural areas and weaker for those in eastern China.