ICTworks

Enabling universal internet access is deemed as a critical step towards achieving prosperity in developing countries. In line with this target, the digital landscape in Sub- Saharan Africa has been changing drastically with fast-growing mobile broadband internet networks.

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.

Mobile Broadband Internet, Poverty and Labor Outcomes in Tanzania seeks to answer the following questions that are particularly important in Africa where a predominant share of people have access to the Internet only through their mobile phones:

• 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?

To answer these questions, this study leveraged three waves of a nationally representative longitudinal household survey on living standards in Tanzania with geospatial information on the rollout of mobile broadband coverage be- tween 2008 and 2013, which shows 3G population coverage more than doubling from 16 percent to 35 percent.

Mobile Broadband Internet Reduces Poverty

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

1. 3G mobile broadband reduces poverty

Households in areas covered by 3G saw household consumption per person rise by 7-11 percentage points. However, the impact on consumption was only statistically significant after more than a year of coverage, showing that these ‘digital dividends’ take time to materialise. Mobile broadband coverage also reduced the proportion of households living below the national poverty line by 5-7 percentage points.

2. Mobile broadband increases access to employment

For working age adults, living in households covered by a mobile broadband network can mean access to new or different employment opportunities. These can in turn impact household consumption positively, thus reducing poverty levels. After 1-2 years of being covered by 3G, more people entered the labour force and there was a 3-8 percentage point increase in wage employment and non-farm self-employment.

There was also a decrease in farm employment by 4-9 percentage points. Given that farm employment in LMICs is often associated with low productivity and low earnings, the finding that 3G coverage facilitates the transition from farm to non-farm employment is important.

3. Young educated men benefit most from 3G coverage

Younger and more educated men tended to benefit the most through higher labour force participation and wage employment. It is worth noting that this group is already more likely to use mobile internet once they received coverage.

Unfortunately, women are less likely than men to own a mobile phone, especially a smartphone, or to use mobile internet, and often face greater barriers to mobile technology due to social norms and structural inequalities. However, women who were skilled and with at least a primary education also benefited from the transition to non-farm employment, although women’s overall labour force participation didn’t increase.

4. We need to address mobile broadband barriers

Living in an area covered by mobile broadband can enable people to improve their lives and over the long-term can increase wage employment and decrease poverty, but some groups still face significant barriers.

In particular, more needs to be done to enable women, rural populations, those with low literacy and low income to access mobile internet. This includes making internet enabled devices and data more affordable, and providing mobile digital skills training, so that everyone can take advantage of the economic opportunities that the internet can provide.

A lightly edited version of Mobile Broadband Internet, Poverty and Labor Outcomes in Tanzania and The impact of mobile broadband coverage on poverty in Tanzania