Empirical Analyses of the Digital Divide in Germany - Age-specific and Regional Aspects

• Main Author: Schleife, Katrin
• Format: Others
• Language: English; en
• Published: 2008
• Online Access: http://tuprints.ulb.tu-darmstadt.de/1086/1/Schleife_diss_final.pdf; Schleife, Katrin <http://tuprints.ulb.tu-darmstadt.de/view/person/Schleife=3AKatrin=3A=3A.html> : Empirical Analyses of the Digital Divide in Germany - Age-specific and Regional Aspects. Technische Universität, Darmstadt [Ph.D. Thesis], (2008)

The use of information and communication technologies (ICT/IT), especially the Internet, has boomed spectacularly over the last decade. ICT thereby have a strong impact on the German economy as a whole but also on the economic conditions of firms and on the private life of individuals. However, large disparities exist between different population groups with regard to their use of new technologies. Individual characteristics, such as education, age, and income can generate large access barriers. Recent data shows that individuals who are less educated, older, and economically inactive have lower levels of computer and Internet skills. Regional characteristics, such as the existing ICT infrastructure and the price structure of ICT goods, can additionally influence the individual access probability. In Germany, regional differences in the rates of Internet use exist between East and West Germany, between federal states, and between rural and urban areas. The mentioned differences in using new technologies are facets of the so-called digital divide. Since the Internet facilitates the availability of information and services as well as the exchange of knowledge, people who are not involved in ICT use can easily fall behind in social and economic participation. Employees and firms that use ICT are likely to gain exceedingly from increases in efficiency. Closing the digital divide is therefore one of the current political challenges and it is crucial to identify the dimensions and origins of the disparity in ICT use. This dissertation focuses on two main facets of the digital divide: age-specific and regional aspects. Firstly, I analyze how the computer use of older workers and their attendance at firm-provided IT training activities are related to their employment chances. Secondly, I study regional differences in the use of ICT in Germany by examining the individual probability of becoming an Internet user, while taking individual and regional factors into account. In chapter 2 of my dissertation, I study empirically the relationship between the computer use of workers with an age between 50 and 60 years and their employment status. The results of the multivariate estimation approach show that older workers are less likely to use a computer on the job compared with younger workers, thereby confirming the findings of earlier research studies. However, taking into account a possible endogeneity bias, further results do not provide clear evidence that computer use on the job induces older workers to delay retirement. In chapter 3 of this dissertation, I focus on the relationship between firm-provided IT training for workers aged 50 or above and their proportion in the firm. I thereby turn to the labor demand side and use firm data to further analyze age-specific aspects of the digital divide in Germany. As the original education is less recent for older workers and they tend to participate less in training activities due to impending retirement, the firms' adoption of new technologies can lead to a decreasing demand for older workers. Technological change is then supposed to be age-biased. My analyses of chapter 3 confirm a negative relationship between the firms' intensity of using information technologies and their proportion of older workers. The extent of IT use within a firm is measured by an indicator of a firm's IT intensity. This indicator is developed by combining various IT items, such as several IT applications executed by the firm, its proportion of computer users, and its IT costs. Providing older workers with IT training could be an appropriate means to reduce the negative impact of a high IT intensity, because older workers can get to know how to use these new technologies and can become more productive and valuable to their employer. The results of my multivariate analyses show that a higher participation rate of older workers in IT training provided by a firm is positively correlated with the proportion of older workers within the firm. While chapter 2 and 3 concentrate on age-specific aspects of the digital divide and their impact on the labor market participation of older workers, the focus of chapter 4 is on regional differences in ICT use at home. In particular for people living in rural areas, the Internet provides many advantages as it can neutralize two major barriers to rural economic growth: large distances and the lack of economies of scale due to smaller market size. However, investments in Internet infrastructure and services are lower in rural areas. Due to the resulting lack in the supply of fast, efficient, and inexpensive Internet infrastructure, the possibilities of accessing and using the Internet for inhabitants of remote areas are limited and they often cannot benefit from the possibilities the Internet offers. In chapter 4, I study the determinants of home Internet use in Germany on the level of counties as well as on the level of individuals. My estimation results confirm the findings of previous studies: the individual probability of becoming an Internet user is influenced by individual characteristics such as age, education, and income. In addition, strong and positive network effects are observable, particularly in the western part of Germany. Moreover, even after taking network effects into account, living in a rural region remains important, in particular in East Germany. In the course of the broadening use of ICT and the ever-growing digital content, applications, and communication opportunities, further considerable efforts need to be made to overcome the digital divide and provide all population groups equal chances to participate in the information society. The main contribution of this dissertation is to draw the reader's attention to age-specific and regional aspects of the digital divide in Germany and to identify requirements for policy actions with regard to closing the digital gap.