Broadband Internet and Income Inequality

Houngbonon Georges V. () and Liang Julienne ()
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Houngbonon Georges V.: Laboratoire de Genie Industrielle, Gif-sur-Yvette, France
Liang Julienne: Groupe Orange, 78 Rue Olivier de Serres, 75015 Paris, France

Review of Network Economics, 2021, vol. 20, issue 2, 55-99

Abstract: Digital technologies like the Internet can affect income inequality through increased demand for employment in manual and abstract jobs and reduced demand for employment in routine jobs. In this paper, we combine city-level income distribution and jobs data with broadband data from France to investigate the impact of broadband Internet access on income inequality. Using an instrumental variable estimation strategy, we find that broadband Internet reduces income inequality through increased employment in manual jobs. These effects increase with the availability of skilled workers and are significant in cities with a large service sector or high-speed Internet access. Further, the diffusion of broadband Internet comes with relatively greater benefits in low-income cities compared to high-income cities. Several robustness checks support these findings.

Keywords: broadband internet; income distribution; employment (search for similar items in EconPapers)
JEL-codes: D31 J20 L96 O15 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1515/rne-2020-0042

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