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Internet access and its implications for productivity, inequality and resilience

Author

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  • Maria Barrero, Jose
  • Bloom, Nicholas
  • Davis, Steven J.
Abstract
About one-fifth of paid workdays will be supplied from home in the post-pandemic economy, and more than one-fourth on an earnings-weighted basis. In view of this projection, we consider some implications of home internet access quality, exploiting data from the new Survey of Working Arrangements and Attitudes. Moving to high-quality, fully reliable home internet service for all Americans ('universal access') would raise earnings-weighted labor productivity by an estimated 1.1% in the coming years. The implied output gains are $160 billion per year, or $4 trillion when capitalized at a 4% rate. Estimated flow output payoffs to universal access are nearly three times as large in economic disasters like the COVID-19 pandemic. Our survey data also say that subjective well-being was higher during the pandemic for people with better home internet service conditional on age, employment status, earnings, working arrangements, and other controls. In short, universal access would raise productivity, and it would promote greater economic and social resilience during future disasters that inhibit travel and in-person interactions.

Suggested Citation

  • Maria Barrero, Jose & Bloom, Nicholas & Davis, Steven J., 2021. "Internet access and its implications for productivity, inequality and resilience," LSE Research Online Documents on Economics 113869, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:113869
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    File URL: http://eprints.lse.ac.uk/113869/
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    References listed on IDEAS

    as
    1. Pabilonia, Sabrina Wulff & Vernon, Victoria, 2021. "Telework and Time Use," GLO Discussion Paper Series 970, Global Labor Organization (GLO).
    2. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
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    15. Marta Angelici & Paola Profeta, 2020. "Smart-working: Work Flexibility Without Constraints," CHILD Working Papers Series 77 JEL Classification: J1, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    16. Jose Maria Barrero & Nicholas Bloom & Steven J. Davis, 2020. "COVID-19 Is Also a Reallocation Shock," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 51(2 (Summer), pages 329-383.
    17. Jose Maria Barrero & Nick Bloom & Steven J. Davis, 2020. "60 Million Fewer Commuting Hours Per Day: How Americans Use Time Saved by Working from Home," Working Papers 2020-132, Becker Friedman Institute for Research In Economics.
    18. Evan DeFilippis & Stephen Michael Impink & Madison Singell & Jeffrey T. Polzer & Raffaella Sadun, 2020. "Collaborating During Coronavirus: The Impact of COVID-19 on the Nature of Work," NBER Working Papers 27612, National Bureau of Economic Research, Inc.
    19. Maho Hatayama & Mariana Viollaz & Hernan Winkler, 2020. "Jobs’ Amenability to Working from Home: Evidence from Skills Surveys for 53 Countries," CEDLAS, Working Papers 0263, CEDLAS, Universidad Nacional de La Plata.
    20. Erdsiek, Daniel, 2021. "Working from home during COVID-19 and beyond: Survey evidence from employers," ZEW Discussion Papers 21-051, ZEW - Leibniz Centre for European Economic Research.
    21. Nicholas Bloom & Steven J. Davis & Yulia Zhestkova, 2021. "COVID-19 Shifted Patent Applications toward Technologies That Support Working from Home," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 263-266, May.
    22. Sabrina Wulff Pabilonia & Victoria Vernon, 2022. "Telework, Wages, and Time Use in the United States," Review of Economics of the Household, Springer, vol. 20(3), pages 687-734, September.
    23. Erik Brynjolfsson & John J. Horton & Adam Ozimek & Daniel Rock & Garima Sharma & Hong-Yi TuYe, 2020. "COVID-19 and Remote Work: An Early Look at US Data," NBER Working Papers 27344, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Joe Piacentini & Harley Frazis & Peter B. Meyer & Michael Schultz & Leo Sveikauskas, 2022. "The Impact of COVID-19 on Labor Markets and Inequality," Economic Working Papers 551, Bureau of Labor Statistics.
    2. Jose Maria Barrero & Nicholas Bloom & Steven J. Davis, 2023. "Long Social Distancing," Journal of Labor Economics, University of Chicago Press, vol. 41(S1), pages 129-172.
    3. Irene Bertschek & Joern Block & Alexander S. Kritikos & Caroline Stiel, 2024. "German financial state aid during Covid-19 pandemic: Higher impact among digitalized self-employed," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 36(1-2), pages 76-97, January.
    4. Lalinsky, Tibor & Anyfantaki, Sofia & Benkovskis, Konstantins & Bergeaud, Antonin & Bun, Maurice & Bunel, Simon & Colciago, Andrea & De Mulder, Jan & Lopez, Beatriz Gonzalez & Jarvis, Valerie & Krasno, 2024. "The impact of the COVID-19 pandemic and policy support on productivity," Occasional Paper Series 341, European Central Bank.
    5. Joël Cariolle & Florian Léon, 2022. "How internet helped firms to cope with COVID-19," Working Papers hal-03592617, HAL.
    6. Erdsiek, Daniel & Rost, Vincent, 2022. "Working from home after COVID-19: Firms expect a persistent and intensive shift," ZEW Expert Briefs 22-06, ZEW - Leibniz Centre for European Economic Research.
    7. Campbell, Richard Cole, 2024. "Need for speed: Fiber and student achievement," Telecommunications Policy, Elsevier, vol. 48(6).
    8. Jeffrey Mollins & Temel Taskin, 2023. "Digitalization: Productivity," Discussion Papers 2023-17, Bank of Canada.

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    More about this item

    Keywords

    home internet access; productivity; Covid-19; wellbeing;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J1 - Labor and Demographic Economics - - Demographic Economics

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