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Broadband Access, Telecommuting and the Urban-Rural Digital Divide

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  • Song, Moohoun
  • Orazem, Peter
  • Singh, Rajesh

Abstract

We investigate the role of broadband access on the probability of telecommuting and whether individuals who work from home receive greater compensation. We also assess whether telecommuting differs between more- and less-densely populated areas. Telecommuting responds positively to local average commuting time and to local access to High-Speed Internet service. Differences in broadband access explain three-fourths of the gap in telecommuting between urban and rural markets. Telecommuters and other IT users do not earn significantly more than otherwise observationally comparable workers. Already highly skilled and highly paid workers are the most likely to telecommute and so they do not earn more because they telecommute. As broadband access improves in rural markets, the urban-rural gap in telecommuting will diminish. The urban-rural pay gap will also decrease if improved broadband access induces some already highly paid urban workers to move to rural areas.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 12495.

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Date of creation: 02 Feb 2006
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Handle: RePEc:isu:genres:12495

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
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Web page: http://www.econ.iastate.edu
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Keywords: urban; Rural; broadband; telecommuting; earnings;

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  1. Patricia Mokhtarian & Ilan Salomon, 2005. "Modeling the Choice of Telecommuting 3: Identifying the Choice Set and Estimating Binary Choice Models for Technology-Based Alternatives," Labor and Demography 0505010, EconWPA.
  2. Harry A. Krashinsky, 2004. "Do Marital Status and Computer Usage Really Change the Wage Structure?," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  3. Litan, Robert & Rivlin, Alice, 2001. "Projecting the economic impact of the Internet," Journal of Financial Transformation, Capco Institute, vol. 2, pages 35-41.
  4. Patricia Mokhtarian & Ilan Salomon & Sangho Choo, 2005. "Measuring the Measurable: Why Can't We Agree on the Number of Telecommuters in the U.S.?," Labor and Demography 0508011, EconWPA.
  5. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  6. Lee, Sang-Hyop & Kim, Jonghyuk, 2004. "Has the Internet changed the wage structure too?," Labour Economics, Elsevier, vol. 11(1), pages 119-127, February.
  7. Enrico Moretti, 2004. "Workers' Education, Spillovers, and Productivity: Evidence from Plant-Level Production Functions," American Economic Review, American Economic Association, vol. 94(3), pages 656-690, June.
  8. Fairlie Robert W, 2004. "Race and the Digital Divide," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-40, September.
  9. Dale W. Jorgenson, 2001. "Information Technology and the U. S. Economy," Harvard Institute of Economic Research Working Papers 1911, Harvard - Institute of Economic Research.
  10. Liu, Jin-Tan & Tsou, Meng-Wen & Hammitt, James K., 2004. "Computer use and wages: evidence from Taiwan," Economics Letters, Elsevier, vol. 82(1), pages 43-51, January.
  11. H, Entorf & Michel Gollac & Francis Kramarz, 1997. "New Technologies, Wages and Worker Selection," Working Papers 97-25, Centre de Recherche en Economie et Statistique.
  12. Todd M. Gabe & Jaison R. Abel, 2002. "Deployment of Advanced Telecommunications Infrastructure in Rural America: Measuring the Digital Divide," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(5), pages 1246-1252.
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