BREAD Working Paper No. 519, July 2017

The Arrival of Fast Internet and Employment in Africa

Jonas Hjort, Jonas Poulsen

Abstract

To show how fast Internet affects employment in Africa, we exploit the gradual arrival of submarine Internet cables and maps of the terrestrial cable network. Robust difference-in-differences estimates from three datasets covering 12 countries show large positive effects on employment rates, with little job displacement across space. A decrease in workers’ likelihood of holding unskilled jobs is offset by a bigger increase in employment in higher-skill occupations. Less educated workers’ employment rate also rises. Firm level data available for some countries indicate that increased firm entry, productivity, and exporting lead to higher job-creation (and/or -saving). Average incomes and wealth rise.

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JEL classification codes: D20,J20,O10

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