Telephone lines in many under-developed economies are only available to
a small number of households. Providing telephone coverage to distant,
rural communities is too costly to make it profitable for companies to
invest in the needed infrastructure. With the cost of providing
cellular coverage decreasing, though, many areas of the developing world
are beginning to communicate using cell-phones. In this paper we study
the effect that providing cell-phone coverage has had on employment,
poverty and household income in South Africa. Research looking at the
effect of providing cell-phone coverage has generally relied on
cross-country data and has found a positive effect on growth. Using the
geographical variation in South Africa we instrument for cell-phone
coverage and look at the effect of providing cellular communication
since 1994 to 2005. We find that cellular coverage had a positive
effect on employment levels but no effect on poverty or household
income. Providing cellular coverage seems to only benefit those in
rural, agricultural areas.
Presented by:
Patrick Nolen (Department of Economics, University of Essex)
Date & time:
March 12, 2008 1:00 pm - March 12, 2008 12:00 am
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