Business or Pleasure: Broadband and Employment in Swedish Municipalities 2007-2011

Sammanfattning: The thesis examines the relationship between expanding coverage of fiber optic broadband and employment in Swedish municipalities during 2007-2011 using a fixed effects panel and an instrumental variables model. Increased fiber coverage among households is estimated to have a negative effect on municipal employment whereas increased coverage among workplaces is weakly positively related to employment. The estimation strategy relies on the differences in broadband deployment both within and between municipalities. Data on fiber coverage is taken from the yearly surveys conducted by the Swedish telecommunications agency, PTS. To mitigate issues of endogenity, topographical variation is used as an instrument for fiber coverage. The instrument is obtained by drawing a custom sample of public data on elevation and calculation sample standard deviation and variance. Common tests suggest that it is too weak to provide robust results, a shortcoming which may be related to low correlation with the endogenous variable as well as a small sample.