# **3.1 Internet Coverage**

Hjort and Poulsen (2019) were among the first to exploit the arrival of submarine internet cables between 2000 and 2010 in Africa by using a difference-in-differences estimation to show the impact of fast internet on employment. They find that the probability that an individual is employed increases between 3.1 and 13.2 percent when fast internet becomes available. In all nine countries covered by relevant household surveys (Benin, Ghana, Kenya, Madagascar, Mozambique, Nigeria, Senegal, Tanzania, and South Africa), the probability of being employed in a skilled occupation increases, but the probability of holding an unskilled job is statistically unaffected when fast internet becomes available. While the impact on the overall process of structural change is likely modest, fast internet appears to shift employment shares towards higher-productivity occupations. The average incomes rise in the areas that see changes in employment when fast internet arrives. Overall, the results imply that expanded access to lower cost ICT resulting from the availability of fast internet increases employment rates in Africa, and that in at least some countries, this happens in part due to the technology’s impact on increasing firm entry, raising firm productivity, and facilitating participation in export markets.

More recently, Masaki et al (2020) identify the relationship between access to broadband internet and household welfare. This research is based on household surveys conducted in Senegal in 2011 and 2018, which provide data on household consumption and poverty level as a proxy for welfare. Addressing the concern of endogeneity by employing two-stage least squares (2SLS) regression analysis (using as an instrument the distance to 3G coverage in neighboring areas outside the immediate vicinity of a given area), the results show that mobile broadband coverage is associated with greater household consumption and reduced poverty incidence, both in rural and urban areas, though to a greater extent in the latter. The total consumption of households with 3G coverage is about 14 percent greater than the consumption of households without 3G coverage. Similarly, 3G coverage is associated with a 10 percent decline in the extreme poverty rate, based on a poverty line of $1.9 per day. In addition, the analysis finds a positive correlation between 3G coverage and salaried employment (although no significant impact on overall employment) and monthly earnings, supporting the hypothesis that digital technologies can increase employment in “better” jobs.

Bahia et al (2020) conduct a similar difference-in-differences analysis of the impact of mobile broadband coverage on consumption and poverty, this time in Nigeria between 2010 and 2016. Again, mobile broadband coverage had large and positive impacts on household consumption levels. Households that had at least one year of mobile broadband coverage experienced an increase in total consumption of about 6 percent. These beneficial effects were found to increase over time, albeit at a decreasing rate. Mobile broadband coverage also reduces the proportion of households below the poverty line by about 4.3 percentage points for extreme poverty and 9