Spillovers effects of wiring schools with broadband: the critical role of children

In this paper we model the roles that broadband use at school and broadband adoption in neighboring households play in the decision to adopt broadband at home and measure their effects empirically. We use data from Portugal between 2008 and 2009 on household broadband penetration and on how much schools use broadband. We use two different sets of instruments for the schools' broadband use to alleviate endogeneity concerns. Both approaches yield similar results which increases our confidence in our findings. We find that broadband use at school leads to higher levels of broadband penetration in neighboring households, in particular in households with children. The average broadband use in schools across our dataset increased the probability of broadband adoption by 25% in households with children, while no statistically significant effect is found in households without children. These results show that wiring schools with broadband is an effective policy to lower the barriers for Internet adoption at home and as such contributes to accelerate the pace of broadband diffusion.