DIRSI releases new study on Internet and poverty in Latin America

The Internet and Poverty:

Opening the Black Box

Study in Latin America shows that Internet connectivity can help alleviate poverty, but that complementary investments in human capital are needed to realize the full potential of broadband.

A study undertaken by DIRSI, found that that the impact of broadband access on economic development is positive but more modest than previously estimated – as much as five times lower than the more optimistic estimations. Further, the study found that connecting schools to the Internet has a very modest impact on student performance in the short-term. According to the study’s conclusions, “the Internet, like other ICTs, can be a powerful tool to achieve many development goals, including poverty alleviation, but this potential will not be realized unless human capital investments are properly articulated with connectivity initiatives”. The study used large household and school-based surveys as well as personal interviews to explore the links between broadband adoption and income, employment and educational achievement in Ecuador, Colombia, Chile, Brazil, Peru and Mexico.

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The Internet and Poverty: Opening the Black Box summarizes the findings from a set of case studies, offering new research directions as well as policy recommendations. Full-length versions of the individual case studies containing detailed discussions about methodology and results can be found in the following links:

Economic Impact of broadband deployment in Ecuador

Internet and economic activity in Colombia, 2007-2011: an analysis of municipalities and 23 main cities

Do broadband and information and communication technologies (ICTS) have a positive impact on school performance? Evidence for Chile

Internet in schools. The effect on educational performance in Peru: 2007-2011

The informational life of the marginalized: a study of digital access in three Mexican towns

Other highlights of the study are:

In Ecuador, broadband availability is associated with a rise in labor incomes of up to 7.5% over a two-year period, though men appear to benefit more than women.

In Colombia, broadband appears to have a positive impact on entrepreneurship, with a 10% increase in broadband associated with a 4% increase in the number of firms (though only a 0.4% increase in tax revenues).

In Brazil, Chile and Peru, broadband in schools appears to have a mixed effect, with a positive impact on drop-out rates but a null or negative effect on test scores. Lack of adequate teacher training is linked to a negative impact on student achievement by diverting the use of broadband to non-educational activities. Yet students from lower-income households tend to benefit relatively more from broadband in schools programs.

In Mexico, in-depth interviews in low-income communities corroborate the key role of infomediaries, particularly school-age children, in promoting adoption among other household members. Such spillover effects should also be considered in the planning and evaluation of ICT-in-schools programs.

Overall, the study calls for caution in undertaking large public investments in broadband connectivity. Any such initiatives must go hand-in-hand with investments in human capital, such as teacher training and digital literacy programs for women, in order to maximize impact and promote equity in the appropriation of benefits.