Internet Access and its Implications for Productivity, Inequality, and Resilience

Innovation and Economic Growth, Networks, the Internet, and Cloud Computing, Networks and Infrastructure and Broadband

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Nicholas Bloom, Steven J. Davis and José María Barrero


Chapter in Rebuilding the Post-Pandemic Economy, Melissa S. Kearney and Amy Ganz, eds., Aspen Economic Strategy Group, 2021


During and after the COVID-19 pandemic, the proportion of employees who work from home increased substantially. Universal access to quality internet access would facilitate working from home, and improve productivity.

Policy Relevance

Access to high-quality internet service improves productivity and resilience.

Main Points

  • In the future, about one fifth of paid workdays will involve work from home, and work from home will continue at even higher levels for well-educated and highly compensated workers.
  • Many survey respondents reported higher productivity when working from home during the pandemic, mainly because of the savings in commuting time; the shift to working from home is expected to boost productivity about 4.6 percent.
  • If all Americans had universal access to reliable, high-quality internet service at home, labor productivity would improve about 1.1 percent, yielding $160 billion in economic gains annually.
  • Lower-income Americans have lower quality internet service, suggesting that universal access could reduce inequality; however, Americans with higher earnings work from home more, tending to increase inequality, implying that universal access would have a neutral effect on inequality overall.
  • Gains from universal access to quality internet service would be three times as large as the negative economic impact of the COVID-19 pandemic.
    • During the pandemic, low-quality internet access reduced productivity about 3 percent.
    • Universal access to high-quality internet service would have lessened the economic impact of the pandemic.
  • People with better home internet service reported higher subjective well-being during the pandemic; universal access to high-quality internet service would promote resilience.
    • Internet access alleviated the health effects of social isolation.
    • The expansion of online commerce made it easy for people to socially distance.
    • Better internet service promoted student engagement in online learning.

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