Do Investments in Digital Infrastructure Improve Employment Outcomes ? Evidence from Türkiye

Banu Demir and Arti Grover

No 11314, Policy Research Working Paper Series from The World Bank

Abstract: This paper examines the impact of improvements in digital infrastructure on labor market performance, focusing on employment and productivity, measured by average wages. The empirical setting exploits the staggered expansion of high-speed fiber broadband across provinces in Türkiye, using linked employer-employee administrative data and complementary Labor Force Surveys. Across specifications, better digital connectivity raises formal employment and wages, with effects concentrated in occupations amenable to remote work. Most of these gains arise from workers—disproportionately women—entering teleworkable occupations enabled by high-quality internet access. Detailed occupational data reveal that these effects are driven by within-province switches from non-teleworkable to teleworkable jobs, consistent with the relaxation of mobility constraints and the expansion of work-from-home opportunities as a key channel. Wage gains are concentrated among high-skilled workers, although employment effects also extend to lower-skilled women in teleworkable roles. In contrast to the effects of digital connectivity, comparable investments in road infrastructure that enhance physical connectivity produce more mixed results: reduced travel times can improve access to jobs, but competition from nearby regions may offset these benefits.

Date: 2026-02-17
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