New research: Broadband policy is jobs policy
A teenage student. (Photo by Leonardo Fernandez Viloria/Getty Images).
It’s no secret that Ohio’s Appalachian counties have the most sluggish labor markets of the counties across the state. According to last month’s Ranking of Ohio County Unemployment Rates from the Ohio Department of Job and Family Services, eight of the ten highest-unemployment counties this month are in Appalachian Ohio.
Meanwhile, Appalachian Ohio also suffers from the worst access to the internet of any region of the state. According to BroadbandNow, the twelve counties with the most households without broadband access in Ohio are all in Appalachian Ohio, with anywhere from 32% to 69% of households having no access to 25 mbps internet.
These two facts about southeast Ohio are likely the result of a number of geographic, economic, and cultural factors. It can be hard to tell whether one drives the other: a weak labor market can hurt demand for services like internet connectivity. Conversely, lack of access to the internet can make it hard for employers to find workers and vice versa.
Some new research from the University of Maryland, however, sheds light on how internet connectivity and employment interact with one another.
Economist George Zuo recently published a study in the American Economic Journal that analyzed the impact of Comcast coverage on employment rates and earnings. This study looked at geographic variation in Comcast coverage, individual variation in eligibility for Comcast services, and the timing of rollout of coverage to estimate what the impact of Comcast coverage has been in the United States on employment rates and earnings.
The estimated impact of Comcast coverage on employment rates and earnings in the study is substantial. Zuo found that households that received broadband has employment rates 10-12 percentage points higher after getting broadband coverage than before. He also found the typical household earned $2,200 more after getting hooked to the internet than they did before.
According to Zuo, earnings impacts are driven by higher likelihood families with internet will enter the labor force and lower unemployment rates for these families. This seems to make sense: higher broadband connectivity should lead to easier job searches, more ability to work at home, and more opportunities for learning at home.
Zuo’s research also suggests broadband connectivity improvement advances equity goals. Employment impacts for families at 150 percent of the federal poverty level (who we can consider “low-income”) are strong while employment impacts for families at 300 percent of the federal poverty level (who we can consider “middle-income”) are nearly nonexistent.
The research has some reasons to curb expectations for Appalachian Ohio, however. In particular, the study finds that employment impacts associated with broadband connectivity were much stronger in urban areas than in non-urban areas.
In light of this information, the state budget’s $250 million grant program for broadband has the potential to provide substantial benefits to households in southeast Ohio and other parts of the state without broadband access. If Zuo’s research can be extrapolated to other settings, broadband development is indeed economic development and high-speed internet is a jobs program. We will see if this pans out as this grant program rolls out over the next couple of years.
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