Empirical Evidence for Broadband as a Skills-Biased Technology
We exploit time and region variation in broadband availability in Georgian villages (settlements) to test whether high speed broadband is a skill-biased technological shock. We use an annual, nationally representative firm survey in Georgia from 20...
| Main Authors: | , , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/724251582594734836/Empirical-Evidence-for-Broadband-as-a-Skills-Biased-Technology http://hdl.handle.net/10986/33398 |
| Summary: | We exploit time and region variation in
broadband availability in Georgian villages (settlements) to
test whether high speed broadband is a skill-biased
technological shock. We use an annual, nationally
representative firm survey in Georgia from 2006 to 2014 and
exploit the non-random phased rollout of broadband internet
across the country to estimate impacts of broadband
availability on firm performance outcomes and wage
inequality using a difference-in-differences approach. Our
main findings suggest that impacts are consistent with
broadband being a complement to initial endowments. We find
positive effects on firm revenues and wages but these
effects are restricted to firms from settlements that lie in
the upper half of average revenue distribution. We find
similar results when disaggregating impacts by the average
wage distribution. Our findings are consistent with ICT
being skills-biased given the positive effects on average
wages and profits and some indication that firms substituted
lower- for higher-skilled workers. Our results point to an
increase in the existing wage gap between the top and bottom
half of the wage distribution but suggest that broadband
availability helped shrink the baseline wage gap between
treated and control settlements. |
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