Spillovers Effects of Wiring Schools with Broadband: the Critical Role of Children

Abstract:     
Providing broadband to schools can be an effective way to foster household Internet adoption in neighboring areas. On the one hand, the infrastructure put into place to meet schools' needs can also be used to serve households. On the other hand, students get acquainted with Internet at school and signal its usefulness to adults at home who can, as a consequence, be more likely to adopt it. In this paper we model the roles that broadband use at school and broadband adoption in neighboring households play in the decision to adopt broadband at home and measure their effects empirically. We use data from Portugal between 2008 and 2009 on household broadband penetration and on how much schools use broadband. We use fixed effects and two different sets of instruments for the schools' broadband use to alleviate endogeneity concerns. Both approaches yield similar results which increases our confidence in our findings. We find that broadband use at school leads to higher levels of broadband penetration in neighboring households, in particular in households with children. The average broadband use in schools across our dataset increased the probability of broadband adoption by 20% in households with children, while no statistically significant effect is found in households without children. These results show that wiring schools with broadband is an effective policy to lower the barriers for Internet adoption at home and as such contributes to accelerate the pace of broadband diffusion.

Number of Pages in PDF File: 52

Keywords: knowledge spillovers, broadband

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