China & World Economy / 100–134, Vol. 30, No. 3, 2022

The Effect of Fast Internet on Employment: Evidence from a Large Broadband Expansion Program in China

Qing Wang, Wenjing Xu, Yanghua Huang, Jidong Yang

Abstract

Information and communication technology plays an important role in human life and social production. The existing literature has mainly studied the economic impact of such technology in developed countries; the use of broadband in developing countries has been overlooked. This paper fills the gap by examining a broadband development program in China. Difference-in-difference estimates show that the deployment of high-quality broadband promoted regional employment in the skilled service sector. The effect was larger in cities with a greater number of educated residents and cities in the west of China. We also found that broadband development stimulated firm creation and innovation. These findings imply that broadband promotes innovation and provides new impetus to the economic transition of emerging markets.