Broadband Internet and the Self-Employment Rate: A Cross-Country Study on the Gig Economy

Piotr Denderski () and Florian Sniekers ()

No 19/13, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: Has the access to broadband Internet changed the composition of employment between payroll and self-employment? We propose a new theory of self-employment based on frictions in the goods and labour market and use variation in broadband access across a panel of OECD countries to test the theory’s empirical predictions. To account for the possible endogeneity of broadband Internet, we instrument broadband adoption by a logistic diffusion model in which the availability of pre-existing technologies predicts broadband penetration. We find that faster Internet prompts more self-employment and lower unemployment. In our theory, this combination implies that the overall improvements in market efficiency stemming from advances in ICT are stronger in the goods than in the labour market.

Keywords: Self-employment; Internet; Gig economy (search for similar items in EconPapers)
JEL-codes: J23 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ict, nep-lma and nep-pay
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