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FRBSF Economic Letter
2003-38; December 26, 2003
Is There a Digital Divide?
As more and more people use computers at home, at work, and at
school, researchers have found that computer use has important
implications for our material well-being. One finding, for example,
is that people who use computers in the workplace tend to earn
higher wages than those who do not, and available evidence suggests
that this reflects, at least in part, the direct impact of skills
that are associated with or acquired through computer use. In addition,
some research has attributed a significant portion of the acceleration
in U.S. productivity gains in the mid-1990s to the diffusion of
computer technology throughout the workplace; therefore, differential
computer use across states may help explain productivity growth
differences across states.
In this Economic Letter, we use a special data set on computer use to assess
whether there is a "digital divide." In particular, we look for substantive
differences in computer use across population groups and states (focusing the
latter on the Twelfth District) and we discuss what the implications of such
differences might be.
Who uses computers?
Our study uses the Computer and Internet Use Supplement to the
government's monthly Current Population Survey (CPS) conducted
in September 2001; the CPS surveys about 60,000 households and
provides information on employment and unemployment. The computer
use supplements ask respondents about computer and Internet use
at home, work, and school. Our primary sample consists of 116,457
individuals age 3 and above; our subsample focusing on computer
use in the workplace consists of 60,868 individuals.
Our tabulations indicate that computer use in the U.S. is quite
widespread, with 54.5% of the population age 3 and older using
computers at home, the same
percent of workers using computers at work, and 84.8% of children age 17
and under (attending school) using computers in school. For the
entire sample,
67.5% used computers through one or more of these sources, up from 43.0%
in 1989, due to increases for all major population groups (our
2001 figures differ
slightly from those in a related study by the U.S. Department of Commerce
2002, because our sample includes only those for whom we also have
data on other
key variables, such as income).
Despite the widespread diffusion of computers, the level of usage
varies dramatically by educational levels, family incomes, and racial
backgrounds. Figures 1 and 2 illustrate these differences in computer
use rates based on two different comparisons. Figure 1 shows rates
of computer usage at home based purely on a breakdown of the sample
by the indicated variable. Figure 2 shows rates of computer usage
from any measured source (home, work, and school), as adjusted by
a regression model. Because access at school and work is likely to
be less dependent on family income than is use at home, such access
is likely to exert an equalizing influence on differences in relative
usage between high-income and low-income groups (see U.S. Department
of Commerce 2002). We take the additional step of using a regression
model that adjusts for differential use by age, race, sex, education,
marital status and number of children, family income, and geographic
area (state and urban/rural), which allows us to isolate the independent
contributions of these factors. |
Our analyses show that educational attainment is the key determinant
of computer use (Figure 1, Panel A; for children under 18, the household
head's educational attainment is used). Home computer use ranges
from 18.9% for those with no high school degree to 81.9% for those
holding graduate degrees. The adjusted results in Figure 2 (Panel
A) show that even after accounting for work and school use and controlling
for family income and other factors, a significant portion of the
educational gap in computer use remains. An individual with a bachelor's
degree is 35.0 percentage points more likely to use a computer than
someone who never finished high school and 21.0 percentage points
more likely to use a computer than someone with just a high school
degree. The disparity is only slightly larger (2.5 percentage points)
for those with graduate degrees.
Family income also is an important determinant of computer use. The unadjusted
differences in Figure 1 (Panel B) are large. The usage rate is 21.1% for individuals
with family income under $15,000 per year and 79.6% for individuals with family
income of at least $75,000 per year. Incorporating use at work and school, and
accounting for other factors that affect the likelihood of computer use, substantially
reduces the differentials across income groups (Figure 2, Panel B). In particular,
in the regression framework the disparity is less than half that in the unadjusted
figures. This means that over half of the unadjusted differences across income
groups (from Figure 1) are caused by other factors that are correlated with higher
income (especially educational attainment). In this adjusted framework, individuals
from the highest-income families are 26.2 percentage points more likely to use
computers (from any source) than are individuals from the lowest-income families;
this is noticeably smaller than the spread based on educational differences (37.5
percentage points).
Substantial differences in computer use also are evident among racial and ethnic
groups (Panel C of Figures 1 and 2). In the unadjusted data, while 61.2% of whites
and 62.7% of Asians use computers at home, only 35.7% of blacks and 31.6% of
Hispanics do. Accounting for use at work and school, and controlling for other
determinants of computer use, substantially reduces the usage gap between whites/Asians
and blacks/Hispanics. Relative to computer use rates for whites, the disparity
in use rates for blacks and Hispanics drops from 25.5 and 29.6 percentage points,
respectively, to 8.4 and 10.4 percentage points. In the general population Asians
have a slightly higher rate of computer usage at home than whites, but controlling
for other factors shows that, all else equal, Asians are 5.5 percentage points
less likely to use computers at home, work, or school.
Does the Twelfth District have an edge in computer
use?
To explore this question, we focus on computer use at work,
which has been identified as a potentially important contributor to productivity
levels and growth. For the regression analyses, we add to the previous set
of variables a set of controls for industry of employment, which accounts for
differences in computer use across states that are due to differences in industrial
structure (based on 23 separate industry categories).
 Figure
3 lists work computer use differentials for the Twelfth District, measured
relative to the rest of the nation. Our unadjusted tabulations show
that Twelfth District states on average have only slightly higher rates
of computer use at work than the rest of the U.S. in 2001. The gap
is 1.5 percentage points, and it is little changed when we incorporate
other determinants of computer use at work.
Looking at the Twelfth District states individually, we find that California
and Washington, two states regarded as being at the forefront of the IT revolution,
exhibit approximately equal or lower rates of computer use than the U.S. outside
the District. In those states' major tech centers-the San Francisco Bay Area
and Seattle-the rates of computer use at work are about 7 to 8 percentage points
above that in the U.S. outside the District, on an unadjusted basis. However,
these usage gaps fall essentially to zero after accounting for differences
in related factors such as income and educational levels (not displayed). These
2001 figures reflect a change for Seattle: additional tabulations (not shown)
indicate that in 1997 Seattle's rate of computer use at work was substantially
above that in the U.S. outside the District (14.8 percentage points on an unadjusted
basis, 7.6 percentage points on an adjusted basis), but during the subsequent
four years the rest of the nation caught up.
As of 2001, however, some of the Twelfth District states did exhibit significantly
higher rates of work computer use than the U.S. outside the Twelfth District.
In particular, Alaska, Arizona, Oregon, and Utah exhibit rates of work computer
use about 3½ to 4 percentage points above the average outside the District,
while work use in Nevada is a bit below the average outside the District. Alaska's
edge may be due in part to the state's relatively high transportation costs,
which can be mitigated through computer connectivity, while the economies of
Arizona, Oregon, and Utah appear to have some unique features that encourage
workplace computer use.
Is there a "digital divide"? Yes
and no
The "digital divide" in the U.S. is based on differential computer
use across education, income, and race/ethnicity groups. In the extreme, a
Hispanic individual with a high school degree or less and family income less
than $15,000 per year has only a 30.6% chance of using a computer (at home,
work, or school), compared to a 93.8% chance for a white person with a graduate
degree and family income over $75,000 per year. Accounting for the independent
effects of these and other factors indicates that college education is the
key determinant of computer use, although substantial gaps are evident across
income categories and, to a lesser extent, racial/ethnic groups as well. Moreover,
additional tabulations with 1997 data (not displayed) indicate that, in percentage
point differences, these gaps have been relatively stable over time (although
they are likely to shrink as computer prices fall further and usage rates for
some groups approach the limit of 100%).
In regional terms, however, there is little evidence of a "digital divide" between
the Twelfth District and the rest of the country, once factors such as education,
family income, and industrial composition are accounted for. The small cross-state
differences in computer use at work are consistent with Daveri and Mascotto's
(2002) findings that productivity growth gaps across states in the 1990s are
explained much more by the concentration of IT production activities in the
state than by the use of computers at work. On the other hand, several Twelfth
District states-notably Arizona, Oregon, and Utah-exhibit relatively high rates
of computer use at work. To the extent that computer use has a causal link
to productivity, these states may enjoy a payoff in the form of the higher
salaries associated with computer use on the job.
Rob Valletta
Research Advisor |
Geoffrey MacDonald
Research Associate |
References
[URLs accessed December 2003.]
Daveri, Francesco, and Andrea Mascotto. 2002. "The
IT Revolution across the U.S. States." Working paper, University
of Parma.
U.S. Department of Commerce. 2002. "A
Nation Online: How Americans Are Expanding Their Use of the Internet." Report
(February).
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