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Broadband Internet and the Self-Employment Rate: A Cross-Country Study on the Gig Economy

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  • Piotr Denderski

  • Florian Sniekers

Abstract

Has the access to broadband Internet changed the composition of employment between payroll and self-employment? We propose a new theory of self-employment based on frictions in the goods and labour market and use variation in broadband access across a panel of OECD countries to test the theory’s empirical predictions. To account for the possible endogeneity of broadband Internet, we instrument broadband adoption by a logistic diffusion model in which the availability of pre-existing technologies predicts broadband penetration. We find that faster Internet prompts more self-employment and lower unemployment. In our theory, this combination implies that the overall improvements in market efficiency stemming from advances in ICT are stronger in the goods than in the labour market.

Suggested Citation

  • Piotr Denderski & Florian Sniekers, "undated". "Broadband Internet and the Self-Employment Rate: A Cross-Country Study on the Gig Economy," Discussion Papers in Economics 19/13, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:19/13
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    References listed on IDEAS

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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