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Broadband speed and unemployment rates: Data and measurement issues

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  • Lobo, Bento J.
  • Alam, Md Rafayet
  • Whitacre, Brian E.

Abstract

We examine the effects of broadband speed on county unemployment rates in the U.S. state of Tennessee. We merge the older National Broadband Map dataset and the newer FCC dataset in lengthening our broadband access data over the period 2011–2015. Extending the dataset improves the precision of the estimates. Our panel regressions control for potential selection bias and reverse causality and show that broadband speed matters: unemployment rates are about 0.26 percentage points lower in counties with high speeds compared to counties with low speeds. Ultra-high speed broadband also appears to reduce unemployment rates; however, we are unable to distinguish between the effects of high and ultra-high speed broadband. We document beneficial effects of the early adoption of high speed broadband on unemployment rates. Better quality broadband appears to have a disproportionately greater effect in rural areas.

Suggested Citation

  • Lobo, Bento J. & Alam, Md Rafayet & Whitacre, Brian E., 2020. "Broadband speed and unemployment rates: Data and measurement issues," Telecommunications Policy, Elsevier, vol. 44(1).
    • Handle: RePEc:eee:telpol:v:44:y:2020:i:1:s0308596118303823
    DOI: 10.1016/j.telpol.2019.101829
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    6. Gary A. Wagner & Hyun Ji Lee, 2024. "Does broadband affect local economic outcomes less than we thought? Micro evidence from Louisiana," Contemporary Economic Policy, Western Economic Association International, vol. 42(1), pages 68-93, January.
    7. Anil Rupasingha & John Pender & Ryan Williams & Joshua Goldstein & Devika Nair, 2023. "Place‐based subsidies and employment growth in rural America: Evidence from the broadband initiatives programme," Papers in Regional Science, Wiley Blackwell, vol. 102(4), pages 677-708, August.
    8. Briglauer, Wolfgang & Krämer, Jan & Palan, Nicole, 2024. "Socioeconomic benefits of high-speed broadband availability and service adoption: A survey," Telecommunications Policy, Elsevier, vol. 48(7).
    9. Whitacre, Brian & Gallardo, Roberto, 2020. "State broadband policy: Impacts on availability," Telecommunications Policy, Elsevier, vol. 44(9).
    10. Briglauer, Wolfgang & Stocker, Volker, 2020. "Bedeutung digitaler Infrastrukturen und Dienste und Maßnahmen zur Förderung der Resilienz in Krisenzeiten," Policy Notes 42, EcoAustria – Institute for Economic Research.
    11. Tranos, Emmanouil & Kitsos, Tasos & Wolf, Levi John, 2024. "Fast and furious: the productivity effects of the geography of experienced internet speeds," OSF Preprints va375, Center for Open Science.
    12. Hasbi, Maude & Bohlin, Erik, 2021. "Impact of Broadband Quality on Median Income and Unemployment: Evidence from Sweden," 23rd ITS Biennial Conference, Online Conference / Gothenburg 2021. Digital societies and industrial transformations: Policies, markets, and technologies in a post-Covid world 238026, International Telecommunications Society (ITS).
    13. Han, Luyi & Wojan, Timothy R. & Goetz, Stephan J., 2023. "Experimenting in the cloud: The digital divide's impact on innovation," Telecommunications Policy, Elsevier, vol. 47(7).
    14. Chen, Yulong & Ma, Liyuan & Orazem, Peter F., 2023. "The heterogeneous role of broadband access on establishment entry and exit by sector and urban and rural markets," Telecommunications Policy, Elsevier, vol. 47(3).
    15. Wang, Jiancheng & Chen, Jialing & Li, Xiaoying & Li, Weiping, 2024. "Broadband acceleration and employment: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    16. Isley, Catherine & Low, Sarah A., 2022. "Broadband adoption and availability: Impacts on rural employment during COVID-19," Telecommunications Policy, Elsevier, vol. 46(7).
    17. Strover, Sharon & Choi, Jaewon & Schrubbe, Alexis, 2024. "Broadband, rural contexts and local economic dynamics," Telecommunications Policy, Elsevier, vol. 48(3).
    18. Yang Liu & Kun Wang & Jianda Wang, 2024. "Tragedy of pollution: Does air pollution hinder China’s progress toward achieving common prosperity?," Economic Change and Restructuring, Springer, vol. 57(6), pages 1-35, December.
    19. Anil Rupasingha & John Pender & Ryan Williams, 2024. "Broadband and rural development: Impacts of the U.S. Department of Agriculture Broadband Initiatives Program on saving and creating jobs," Economic Inquiry, Western Economic Association International, vol. 62(2), pages 698-721, April.
    20. Jamison, Mark A. & Wang, Peter, 2023. "Disparate Impacts of Broadband on Women and Minorities: The Case of Broadband in the U.S," 32nd European Regional ITS Conference, Madrid 2023: Realising the digital decade in the European Union – Easier said than done? 277974, International Telecommunications Society (ITS).
    21. George Charalampopoulos & Dimitris Katsianis & Dimitris Varoutas, 2022. "Economic replicability tests: an “out-of-the-box” implementation," Netnomics, Springer, vol. 22(2), pages 115-138, October.
    22. Ayman A. El-Saleh & Abdulraqeb Alhammadi & Ibraheem Shayea & Nizar Alsharif & Nouf M. Alzahrani & Osamah Ibrahim Khalaf & Theyazn H. H. Aldhyani, 2022. "Measuring and Assessing Performance of Mobile Broadband Networks and Future 5G Trends," Sustainability, MDPI, vol. 14(2), pages 1-20, January.
    23. Wolfgang Briglauer & Carlo Cambini & Klaus Gugler & Volker Stocker, 2023. "Net neutrality and high-speed broadband networks: evidence from OECD countries," European Journal of Law and Economics, Springer, vol. 55(3), pages 533-571, June.
    24. Worden, David & Hambly, Helen, 2022. "Willingness to pay and pricing for broadband across the rural/urban divide in Canada," Telecommunications Policy, Elsevier, vol. 46(2).
    25. Biedny, Christina & Whitacre, Brian & Gallardo, Roberto, 2022. "Do ‘dig once’ and permitting policies improve fiber availability?," Telecommunications Policy, Elsevier, vol. 46(5).

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    More about this item

    Keywords

    Broadband speed; Unemployment rates; Selection bias; Endogeneity; Rural counties;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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