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

Article Source: Chapter in Rebuilding the Post-Pandemic Economy, Melissa S. Kearney and Amy Ganz, eds., Aspen Economic Strategy Group, 2021
Publication Date:
Time to Read: 2 minute read
Written By:

 José  María Barrero

José María Barrero

 Steven J.  Davis

Steven J. Davis



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.


Key Takeaways:
  • 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.



Nicholas Bloom

About Nicholas Bloom

Nicholas (Nick) Bloom is the William Eberle Professor of Economics at Stanford University, a Senior Fellow of SIEPR, and the Co-Director of the Productivity, Innovation and Entrepreneurship program at the National Bureau of Economic Research. His main research interests are on measuring and explaining management and organizational practices across firms and countries, and trying to use this to explain differences in firm and country level growth. He also works on innovation and IT, looking at factors that affect these such as competition, tax, learning and Government regulations.