TY  - JOUR
AU  - Goolsbee,Austan
AU  - Guryan,Jonathan
TI  - The Impact of Internet Subsidies in Public Schools
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9090
PY  - 2002
Y2  - August 2002
UR  - http://www.nber.org/papers/w9090
L1  - http://www.nber.org/papers/w9090.pdf
N1  - Author contact info:
Austan Goolsbee
Booth School of Business
University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-5869
Fax: 773/702-0458
E-Mail: goolsbee@chicagobooth.edu

Jonathan Guryan
Northwestern University
Institute for Policy Research
2040 Sheridan Road
Evanston, IL 60208
Tel: 847/467-7144
E-Mail: j-guryan@northwestern.edu
AB  - In an effort to alleviate the perceived growth of a digital divide, the U.S. government enacted a major subsidy for Internet and communications investment in schools starting in 1998. The program subsidized spending by 20-90 percent, depending on school characteristics.  Using new data on school technology usage in every school in California from 1996 to 2000 as well as application data from the E-Rate program, this paper shows that the subsidy did succeed in significantly increasing Internet investment.  The implied first-dollar price elasticity of demand for Internet investment is between -0.9 and -2.2 and the greatest sensitivity shows up among urban schools and schools with large black and Hispanic student populations.  Rural and predominantly white and Asian schools show much less sensitivity.  Overall, by the final year of the sample, there were about 66 percent more Internet classrooms than there would have been without the subsidy. Using a variety of test score results, however, it is clear that the success of the E-Rate program, at least so far, has been restricted to the increase in access.  The increase in Internet connections has had no measurable impact on any measure of student achievement.
ER  -