Economic Impacts of Mobile Broadband Innovation: Evidence from the Transition to 4G
31 Pages Posted: 28 May 2020
Date Written: May 21, 2020
This study reports estimates from a model of the economic effects of 4G mobile wireless technology adoption in the United States on employment and economic growth and, based on those results, projects the economic benefits of 5G adoption under different counterfactual scenarios. Using panel vector autoregression techniques and state-level data on 4G adoption from Q3 2010 to Q4 2014, we find strong evidence of a direct relationship between the pace of 4G adoption and growth in employment and output. We project that if 5G adoption follows the path of 4G adoption in the United States, then, at its peak, 5G will contribute approximately 3 million jobs and $635 billion in GDP to the U.S. economy in the fifth year following its introduction. However, if 5G follows the slower, shallower path at which 3G technology was adopted, then it will contribute approximately 1.2 million jobs and $264 billion to the U.S. economy at its peak in the sixth year following its introduction.
Keywords: 5G, 4G, LTE, mobile broadband, ICT, communications, communications infrastructure, Panel VAR, telecommunications, economic growth, economic dynamism, job creation, reverse causality
JEL Classification: O31, O33, O47, O51, L63, J21, E65
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