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Investing in Internet access boosts incomes, concludes Latin American study

April 27, 2016

High-speed Internet access, or broadband, can effectively contribute to economic and social development, but only when it is combined with investments in human capital, such as teacher training and digital literacy programs for women, according to a study in Latin America. 

Diálogo Regional sobre la Sociedad de la Información (DIRSI), a regional ICT policy network, used large household and school-based surveys as well as personal interviews to explore the links between broadband adoption and income, employment, and education in Brazil, Chile, Colombia, Ecuador, Mexico, and Peru. 

DIRSI concluded that “the Internet, like other ICTs, can be a powerful tool to achieve many development goals, including poverty alleviation, but this potential will not be realized unless human capital investments are properly articulated with connectivity initiatives.”  It also found that the impact of broadband on overall economic growth is five times lower than the more optimistic estimations.  Similarly, connecting schools to the Internet has a very modest impact on student performance in the short-term.

Other highlights of the study are

  • In Ecuador, broadband availability is associated with a rise in incomes of up to 7.5% over two years;
  • Men appear to benefit more than women from broadband adoption. Interviews conducted in Mexico suggests this is due to differences in occupations and household responsibilities between men and women;
  • In Colombia, broadband appears to have a positive impact on entrepreneurship, with a 10% increase in broadband associated with a 4% increase in the number of firms;
  • In Brazil, Chile, and Peru, broadband in schools appears to have a mixed effect, with a positive impact on drop-out rates but a negligible, or negative effect on test scores. The lack of adequate teacher training had a negative impact on student achievement by diverting the use of broadband to non-educational activities.  Yet students from lower-income households with no Internet access at home tend to benefit more from broadband in schools programs.

The report Internet and Poverty: Opening the Black Box contains detailed research findings as well as policy recommendations.

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