The Skill Complementarity of Broadband Internet *

2015/07/16 by Anders Akerman, Anders Åkerman, Ingvil Gaarder +1 · 21 citations
Economics, Econometrics and Finance · Engineering · #Labor market dynamics and wage inequality #ICT Impact and Policies #Firm Innovation and Growth

paper · pdf · doi:10.1093/qje/qjv028

Abstract

Abstract Does adoption of broadband internet in firms enhance labor productivity and increase wages? Is this technological change skill biased or factor neutral? We combine several Norwegian data sets to answer these questions. A public program with limited funding rolled out broadband access points and provides plausibly exogenous variation in the availability and adoption of broadband internet in firms. Our results suggest that broadband internet improves (worsens) the labor market outcomes and productivity of skilled (unskilled) workers. We explore several possible explanations for the skill complementarity of broadband internet. We find suggestive evidence that broadband adoption in firms complements skilled workers in executing nonroutine abstract tasks, and substitutes for unskilled workers in performing routine tasks. Taken together, our findings have important implications for the ongoing policy debate over government investment in broadband infrastructure to encourage productivity and wage growth.

Citations

• Broadband Infrastructure and Economic Growth
• Identification and Estimation of Local Average Treatment Effects
• What Determines Productivity?

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