The Internet and Local Wages: A Puzzle
Abstract
How did the diffusion of the internet affect regional wage inequality? We examine the relationship between business investment in advanced internet technology and local variation in US wage growth between 1995 and 2000. We identify a puzzle. The internet is widespread, but the economic payoffs are not. Advanced internet technology is only associated with substantial wage growth in the 6 percent of counties that were already highly wealthy, educated, and populated and had IT-intensive industry. Advanced internet and wage growth appear unrelated elsewhere. Overall, advanced internet explains over half the difference in wage growth between already well-off counties and all others. JEL: J31, L86, O33, R11, R23
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
Claims other papers make about this one
Each is checked against this paper’s own text: does it say what the citing paper says it does?
The Forman et al. (2012) regression corresponds to Regression 2 with some controls.
“This regression corresponds to Regression 2 with some controls.”
From Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects (2020) · cites this paper as Forman et al. (2012)
The Forman et al. (2012) regression is a fuzzy design because the treatment of interest is whether a business uses Internet, which varies within (county,year) cells.
“This a fuzzy design: the treatment of interest is whether a business uses Internet, which varies within (county,year) cells.”
From Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects (2020) · cites this paper as Forman et al. (2012)
In the Forman et al. (2012) regression Equation (1), the dependent variable is the difference between log wages in 2000 and 1995 in county i, and the explanatory variables are the proportion of businesses using Internet in county i in 2000, and controls.
“In regression Equation (1), the dependent variable is the difference between log wages in 2000 and 1995 in county i, and the explanatory variables are the proportion of businesses using Internet in county i in 2000, and control variables.”
From Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects (2020) · cites this paper as Forman et al. (2012)
The stable groups assumption is satisfied for the Forman et al. (2012) regression because there are counties with no Internet investment in 2000.
“The stable groups assumption is satisfied: there are counties with no Internet investment in 2000.”
From Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects (2020) · cites this paper as Forman et al. (2012)
Cites
The Skill Content of Recent Technological Change: An Empirical Exploration
Autor, D. H., Levy, F., & Murnane, R. J. (2003) · The Quarterly Journal of Economics · doi:10.1162/003355303322552801 · Cited by 6,205 · see citing works
The polarization of the U.S. labor market
Autor, D. H., Katz, L. F., & Kearney, M. S. (2006) · American Economic Review · doi:10.1257/000282806777212620 · Cited by 1,594 · see citing works
Flagged first, then by citations
Cited by
Sorted by citations
Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects
de Chaisemartin, C., & D’Haultfœuille, X. (2020) · American Economic Review · doi:10.1257/aer.20181169 · Cited by 5,031 · see citing works
Goldfarb, A., & Tucker, C. (2019) · Journal of Economic Literature · doi:10.1257/jel.20171452 · Cited by 2,744 · see citing works
Salemink, K., Strijker, D., & Bosworth, G. (2017) · Journal of Rural Studies · doi:10.1016/j.jrurstud.2015.09.001 · Cited by 1,101 · see citing works
- Authors
- Forman, C., Goldfarb, A., & Greenstein, S.
- Affiliations
- College of Management, Georgia Institute of Technology, 800 West Peachtree Street NW, Atlanta, GA 30308.
- Rotman School of Management, University of Toronto, 105 St. George Street, Toronto, ON M5S 3E6.
- Northwestern University (US)
- ORCID
- Greenstein, Shane
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2012-02-01
- Volume
- 102
- Issue
- 1
- Pages
- 556-575
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W2094111477
- Cited by
- 452
- References
- 2
- Citations by year
- 2026: 77 · 2025: 61 · 2024: 46 · 2023: 37 · 2022: 38 · 2021: 39 · 2020: 21 · 2019: 18 · 2018: 18 · 2017: 14 · 2016: 16 · 2015: 15 · 2014: 24 · 2013: 10 · 2012: 14
- FWCI
- 48.24
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- American Economic Review (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
- Physical Sciences › Engineering › Media Technology › ICT Impact and Policies
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Regional Economics and Spatial Analysis
- Keywords
- Internet diffusion, regional wage inequality, wage growth, regional economic disparities
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
