Does Broadband Internet Promote Digital Labor and Territorial Cohesion? Empirical Evidence from the New Generation Broadband Extension Program in Spain

Abstract

We exploit the New Generation Broadband Extension Program (PEBA) in Spain as a source of exogenous variation in the status of broadband internet at the regional level. We use unique company data from a large European online labor market to study the effect of the deployment of broadband internet on digital labor and territorial cohesion. In terms of digital labor, we provide empirical evidence for a positive impact of the deployment of broadband internet on the number of online workers and online jobs done in PEBAtreated regions. In terms of territorial cohesion, we find that, while workers located in urban areas have higher expected wages than workers in PEBA-treated rural areas, there are no essential differences in the agreed wages they obtain. We also find that the PEBA program led to a small and statistically significant increase in the population of PEBA-treated regions.

Keywords: State aid, ex-post evaluation, technological change, broadband internet, digital labor, future of work, territorial cohesion, exogenous variation, wages, New Generation Broadband Extension Program, PEBA

JEL Classification: C32, J31, L96