The Impact of Ultra-Broadband on Labor Income: An Event Study Approach

We study the impact of ultra-broadband (UBB) connections on labor income and employment of employed and self-employed workers. We use micro-level panel data for the Italian municipalities over the period 2012–2019, and we exploit the staggered roll-out of UBB started in 2015. Through an event study approach, we find evidence of endogeneity between UBB roll-out and labor market outcomes. To identify causal relationships, we use income from pensions to implement the estimator developed by Freyaldenhoven et al. (2019). We find that access to UBB connections significantly increases income from self-employed workers through the increase of their number. Such an effect is mostly driven by a rise in self-employed workers, which is concentrated in urban areas, and in municipalities at the top and bottom quartiles of labor income.