The Impact of Internet Subsidies in Public Schools

Austan Goolsbee and Jonathan Guryan

No 9090, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In an effort to alleviate the perceived growth of a digital divide, the U.S. government enacted a major subsidy for Internet and communications investment in schools starting in 1998. The program subsidized spending by 20-90 percent, depending on school characteristics. Using new data on school technology usage in every school in California from 1996 to 2000 as well as application data from the E-Rate program, this paper shows that the subsidy did succeed in significantly increasing Internet investment. The implied first-dollar price elasticity of demand for Internet investment is between -0.9 and -2.2 and the greatest sensitivity shows up among urban schools and schools with large black and Hispanic student populations. Rural and predominantly white and Asian schools show much less sensitivity. Overall, by the final year of the sample, there were about 66 percent more Internet classrooms than there would have been without the subsidy. Using a variety of test score results, however, it is clear that the success of the E-Rate program, at least so far, has been restricted to the increase in access. The increase in Internet connections has had no measurable impact on any measure of student achievement.

JEL-codes: H2 I2 (search for similar items in EconPapers)
Date: 2002-08
New Economics Papers: this item is included in nep-lab, nep-net, nep-pbe and nep-ure
Note: PE ED
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published as Goolsbee, Austan and Jonathan Guryan. "The Impact Of Internet Subsidies In Public Schools," Review of Economics and Statistics, 2006, v88(2,May), 336-347.

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Journal Article: The Impact of Internet Subsidies in Public Schools (2006)
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