ICTworks

Enabling universal access to the internet is deemed as a critical step towards achieving prosperity in developing countries.The digital landscape in Sub-Saharan Africa has fast-growing mobile broadband internet networks, which have increased three-fold from 24% to 75% between 2010 and 2019.

However, despite enthusiasm around the potential role that internet plays in spurring growth and tackling poverty across developing countries, there is limited evidence on the welfare effects of mobile broadband internet – particularly among the poor and vulnerable in Sub-Saharan Africa.

• What are the impacts of expanding mobile broadband coverage on poverty, household consumption and labor market outcomes in developing countries?
• Who benefits from improved coverage of mobile internet?

These questions are particularly important in Africa where a predominant share of people have access to the Internet only through their mobile phones. In particular, Tanzania is among the top few countries where notable increases in mobile phone and smartphone penetration are expected in the coming years.

Who Benefits from Mobile Internet Access?

Mobile Broadband Internet, Poverty and Labor Outcomes in Tanzania applies a difference-in-differences estimation using panel household survey data combined with geospatial information on the rollout of mobile broadband coverage in Tanzania.

We leverage three waves of a nationally representative longitudinal household survey on living standards in Tanzania with geospatial information on the rollout of mobile broadband coverage between 2008 and 2013, which shows 3G population coverage more than doubling from 16% to 35%.

By matching the location of each household in the panel survey with coverage maps of mobile internet, we can determine with precision the time when individual households began receiving mobile internet coverage, and we can empirically test whether the staggered rollout of mobile internet networks has contributed to changes in welfare and poverty reduction.

Our main results show significant positive effects of mobile broadband coverage on house- hold per capita consumption. Households that resided in areas covered by 3G experienced an 7-11 percentage point increase in total per capita consumption. These digital dividends materialize over time and become statistically significant after more than one year of ex- posure to 3G coverage.

Mobile internet coverage also reduces the proportion of households below the national poverty line by 5-7 percentage points. These results are consistent and similar in magnitude to recent studies for Nigeria, the Philippines, and Senegal. These effects are heterogeneous.

Mobile Internet Benefits Skilled Men

Working age individuals living in areas covered by mobile internet witnessed an increase in labor force participation, wage employment, and non-farm self-employment, and a decline in farm employment. These effects vary by age, gender and skill level.

Younger and more skilled men benefit the most through higher labor force participation and wage employment, while high-skilled women benefit from transitions from self-employed farm work into non-farm employment.

Differently to men, we do not find evidence of changes in female labor force participation or changes in wage employment for women. These findings are consistent with previous studies which suggest that, while women can benefit from digital technologies, they often face greater difficulties to leverage them due to a mix of social norms, intra-household dynamics, lack of access of productive assets, and being less likely than men to use the internet.

This shows that while mobile technology can enable individuals to improve their welfare, some socioeconomic and demographic groups still face significant barriers to materialize the potential gains of being connected. This highlights the importance of ensuring that these underserved groups, particularly women but also older individuals, those living in rural areas, illiterate and the poor have the skills and resources to leverage the economic opportunities brought by digital technologies.

A lightly edited synopsis of Mobile Broadband Internet, Poverty and Labor Outcomes in Tanzania by Kalvin Bahia, Pau Castells, Genaro Cruz of GSMA; Takaaki Masaki and Carlos Rodriguez-Castela of The World Bank, and Viviane Sanfelice, Temple University