The Rewards of Municipal Broadband: An Econometric Analysis of the Labor Market

40 Pages Posted: 18 Jul 2019

See all articles by George S. Ford

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies

Alan Seals

Auburn University - Department of Economics

Date Written: May 2019

Abstract

Worried about being left behind in the Digital Age, a few hundred municipalities have chosen to construct and operate high-speed Internet networks. Above all else, it is the impacts on the labor market—i.e., the promise of “more jobs”—that form the policy justification for these municipal investments, though evidence of such effects is informal and anecdotal. In this article, we offer (to our knowledge) the first statistical evidence on the effects on labor market outcomes of municipal broadband systems. Using data obtained from the U.S. Census Bureau’s American Community Survey, we apply the Difference-in-Differences estimator, augmented with Coarsened Exact Matching and the wild bootstrap, to quantify the economic impact, if any, of the county-wide government-owned network (“GON”) in Chattanooga Tennessee on labor market outcomes. Across a variety of empirical models, we find no payoffs in the labor market from the city’s broadband investments. An automotive plant built in the area is, however, found to substantially increase automobile manufacturing employment. Since Chattanooga’s system is an overbuild of multiple private providers, we stress that our findings may not be generalized to areas where broadband services are not available absent the municipal system. Also, our results cannot speak to the benefits of high-speed Internet services generally, since broadband Internet service was and remains available in Chattanooga absent the municipal system.

Keywords: Municipal Broadband, Labor Markets, Difference-in-Differences, Broadband

JEL Classification: J08, H11, L52, L86

Suggested Citation

Ford, George S. and Seals, Richard A, The Rewards of Municipal Broadband: An Econometric Analysis of the Labor Market (May 2019). Available at SSRN: https://ssrn.com/abstract=3420465 or http://dx.doi.org/10.2139/ssrn.3420465

George S. Ford (Contact Author)

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States

Richard A Seals

Auburn University - Department of Economics ( email )

0326 Haley Center
Auburn University, AL 36849-5049
United States
334-844-2907 (Phone)

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