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Rationalizing the E-Rate: The Effects of Subsidizing IT in Education

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Starting in 1998, the E-Rate program has provided $2.25 billion to subsidize Internet access in schools and libraries serving low income populations in the US. I analyze the effect of E-Rate subsidies on educational outcomes for Texas high schools over the 1994-2003 time period. Consistent with previous economic analyses, I find few, if any, improvements in student achievements. I do find evidence that experienced teachers are reallocated within districts toward schools receiving E-Rate grants. I also find evidence that the pool of college entrance exam takers is affected by E-Rate grants such that relying on average scores could lead to incorrect conclusions.

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  • Michael R. Ward, 2005. "Rationalizing the E-Rate: The Effects of Subsidizing IT in Education," Working Papers 05-25, NET Institute, revised Oct 2005.
    • Handle: RePEc:net:wpaper:0525
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    1. Hyunbae Chun, 2003. "Information Technology and the Demand for Educated Workers: Disentangling the Impacts of Adoption versus Use," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 1-8, February.
    2. Austan Goolsbee & Jonathan Guryan, 2006. "The Impact of Internet Subsidies in Public Schools," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 336-347, May.
    3. Bartel, Ann P & Lichtenberg, Frank R, 1987. "The Comparative Advantage of Educated Workers in Implementing New Technology," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 1-11, February.
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    Keywords

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    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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