The Contribution of Us Broadband Infrastructure Subsidy and Investment Programs to GDP Using Input-Output Modeling
38 Pages Posted: 16 Feb 2024
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The Contribution of Us Broadband Infrastructure Subsidy and Investment Programs to GDP Using Input-Output Modeling
The contribution of US broadband infrastructure subsidy and investment programs to GDP using Input-Output modeling
The Contribution of US Broadband Infrastructure Subsidy and Investment Programs to GDP Using Input-Output Modeling
Abstract
More than one-fifth of the US population does not subscribe to a fixed broadband service despite broadband being a recognized merit good. For example, less than 4% of citizens earning more than US $70k annually do not have broadband, compared to 26% of those earning below US $20k annually. To address this, the Biden Administration has undertaken one of the largest broadband investment programs ever via The Bipartisan Infrastructure Law, with the aim of expanding broadband connectivity to all citizens. We examine existing broadband availability, adoption, and need for each US state, and then construct an Input-Output model to explore the potential macroeconomic impacts of broadband spending to Gross Domestic Product (GDP). The findings suggest a macroeconomic contribution to US GDP as high as US $84.8 billion for the Broadband Equity, Access and Deployment program, $55.2 billion for the Affordable Connectivity Program, and $5.99 billion for the Tribal Broadband Connectivity Program. Overall, the broadband allocations could expand US GDP by $146 billion (0.13% of annual US GDP over the next five years). We contribute one of the first economic impact assessments of the US Bipartisan Infrastructure Law to the literature.
Keywords: Infrastructure, Broadband, Universal Broadband, Economic Development
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