Broadband Norwegian average is over

by  Tyler Cowen in

Here is the new paper by Akerman, Gaarder, and Mogstad on how Norwegian broadband access has helped the higher earners and largely hurt unskilled labor:

Does adoption of broadband internet in firms enhance labor productivity and increase wages? And is this technological change skill biased or factor neutral? We exploit rich Norwegian data to answer these questions. A public program with limited funding rolled out broadband access points, and provides plausibly exogenous variation in the availability and adoption of broadband internet in firms. Our results suggest that broadband internet improves (worsens) the labor outcomes and productivity of skilled (unskilled) workers. We explore several possible explanations for the skill complementarity of broadband internet. We find suggestive evidence that broadband adoption in firms complements skilled workers in executing nonroutine abstract tasks, and substitutes for unskilled workers in performing routine tasks. Taken together, our findings have important implications for the ongoing policy debate over government investment in broadband infrastructure to encourage productivity and wage growth.

The emphasis is added by this blogger, not from the authors.

Comments

Chris

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If the "skill" is using the internet this goes without saying.

jean-louis salvignol

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The PDF is here :

http://ftp.iza.org/dp7762.pdf

Andrew M

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Improvements in technology always benefit skilled workers over unskilled. This is not news. The solution is to train the unskilled workers.

Kids need to be taught this too. If you slack off in your education, you can't just fall back on a career as a taxi driver: by the time you're an adult the taxis will drive themselves.

AB

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Always? Not until recently. Ever heard of deskilling?

Miguel Madeira

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The First Industrial Revolution largely benefited unskilled workers over trained artisans.

The Engineer

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So did the Second. The assembly line in particular put a LOT of craftsmen out of business. Think of hand-built cars before the Model T.

Ano nymous

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I'm not sure about that claim. Read "Hard Times" by Dickens and you might conclude that they might have been better off as peasants. I don't think it was until the right of both labour (workers) and capital (shareholders) to negotiate on something remotely resembling "equal" negotiating power, i.e. not until the late 1800s in UK and not until the 50s and 60s in many Western countries, that workers could be easily said to enjoy better conditions than pre-industrial revolution. I think the gains mostly went to owners. But then the role of education wasn't so important then, so perhaps this itself led to higher capital accumulation and more rapid expansion of economic production potential.

Chris Hansen

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Taxi Driving is an area where the internet has caused big productivity gains allowing less skilled entrants to get into the business.

Chris Hansen

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For now ...

JWatts

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"Improvements in technology always benefit skilled workers over unskilled. "

That's just untrue. As several workers have already pointed out, the Industrial Revolution, assembly line, etc specifically allowed non-skilled workers to produce quality products at high speed.

Axa

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I'm don't get the idea that 256 kbps or 32 KB/s is a broadband connection. That happened in late 90s and it never felt "fast". Productivity enhancers like video conferences don't run on 256 kbps connections. Usually, ISPs sell you internet in a 10:1 download/upload ratio. Skype at least needs 300 kbps upload, that means a 3 Mbps connection. 10x faster than the broadband definition used in the article.

Dale

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While the definition of broadband is indeed outdated, the data in the paper only goes through 2007. A 7 year lag to do policy-relevant research is simply too long, especially in a rapidly changing technological environment. Perhaps it is time that economists pay attention to (1) the need for more timely publishing of research, and (2) more widespread provision of data for the purposes of replication. There is nothing wrong with this paper - the problem is that we get to see single efforts like this, too long after the fact, and with no ability to update/replicate/extend the research.

Floccina

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But are the unskilled workers happier with the higher speeds?

Ano nymous

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Probably very busy people will get better use out of good broadband access, while people with little or no work might use it to play games, surf on useless sites, etc., instead of the ideals of using it to look for work and get materials to study and learn skills.

In Canada, early broadband access programs were focused through libraries, and included lots of courses, mostly taught by computer whiz teens, to teach people useful basic skills.

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