Introduction

The rapid expansion of mobile broadband technologies over the past two decades has profoundly transformed communication, work, and access to economic opportunities. In 2023, approximately 78 per cent of the global population owned a mobile phone, and nearly 67 per cent used the internet. Mobile broadband, specifically 3G networks, served as a primary driver of this shift by supporting online banking, e-commerce, and remote learning. While 95 per cent of the global population was covered by at least 3G by 2023, significant discrepancies remain; coverage reaches only 77 per cent in low-income countries compared to near-universal availability in high-income contexts. These disparities, alongside persistent gender gaps in digital literacy and ownership, suggest that the labour market impacts of connectivity may vary considerably by geography and gender.

Literature review

Research on the relationship between internet access and labour market outcomes indicates that effects depend on the stage of digital diffusion. Studies from lower-coverage and early-diffusion contexts generally document positive effects on employment, job matching, and participation. For instance, fast internet arrival in Africa increased employment rates by between 3 and 13 per cent across 12 countries. However, these positive effects appear to diminish or reverse as coverage matures. Evidence from advanced settings suggests smaller employment gains, consistent with diminishing returns. The literature on gender-specific impacts follows a similar pattern, with positive findings concentrated in developing contexts, though absolute gains for women do not always translate into narrowed gender gaps in earnings or job quality.

Data and variables

This analysis utilise harmonised labour force survey microdata from ILOSTAT for 52 countries between 2004 and 2023, covering approximately 28 per cent of the global labour force. The dataset prioritises labour force surveys to ensure consistency in measuring employment and unemployment status across 831 sub-national regions. Connectivity data is sourced from Collins Bartholomew’s Mobile Coverage Explorer, which provides global maps of 2G and 3G network coverage at a 1-kilometre resolution. These are combined with population density maps to create population-weighted measures of coverage for each sub-national region. The study also employs geocoded data on lightning strike frequency and rainfall as part of its empirical strategy.

Empirical strategy

The report employs two primary methods to identify the causal impact of 3G coverage. First, ordinary least squares (OLS) regressions are used, incorporating region and time fixed effects alongside controls for 2G coverage and rainfall. Second, an instrumental-variable (IV) strategy exploits regional variation in lightning strike frequency. Higher lightning strike frequency is associated with increased costs for constructing and maintaining telecommunications infrastructure, providing a plausibly exogenous source of variation in 3G expansion. The first-stage F-statistic of 9.2 meets conventional thresholds. This approach helps mitigate concerns regarding omitted-variable bias and reverse causality, where network rollout might otherwise be correlated with local economic conditions.

Results

The findings demonstrate that the labour market effects of 3G expansion are highly context-dependent. Pooled OLS regressions show near-zero average effects on participation, with small employment increases offset by declining unemployment. In contrast, IV estimates indicate more negative consequences: a 10-percentage-point increase in 3G coverage reduces the labour force participation rate by 1.3 percentage points and the employment-to-population ratio by 2.7 percentage points. These IV results are heavily influenced by high-income countries that entered the sample at advanced stages of diffusion, where marginal returns to additional expansion are low or negative. Heterogeneity analysis reveals that in countries with low initial coverage, 3G rollout is associated with higher participation and employment, particularly for women.

Employment composition

Digital expansion reshapes not only whether people work but also the type of work they perform. In lower-income settings, additional coverage is associated with shifts away from employee status and toward own-account work and contributing family work. This suggests that connectivity may initially strengthen participation in traditional or household-based productive activities rather than formal wage work. By contrast, in more advanced contexts, compositional shifts involve increases in wage employment, reallocation toward services and industry, and a movement from very small firms to medium-sized enterprises. The results highlight that digital infrastructure policy alone is unlikely to deliver inclusive improvements unless accompanied by interventions supporting formalisation and job quality.

Employment quality

The report finds that 3G expansion has a mostly null impact on average weekly hours worked across genders. However, there is evidence that connectivity may widen gender gaps in earnings in high-income contexts while potentially narrowing them in lower-income settings. IV regressions suggest the earnings ratio between women and men worsens by 3.3 percentage points for every 10-percentage-point increase in 3G coverage. Gendered impacts are most robust regarding youth disengagement in poorer settings; the female-to-male NEET (not in employment, education, or training) ratio rises with coverage, indicating that young women face greater barriers to translating connectivity into labour market or educational advancement.

Robustness and limitations

Validity checks confirm that the estimated impacts are not merely a reflection of older segments being pushed out of the labour market, as results remain consistent when restricting the sample to individuals aged 15 to 64. Excluding high-income countries or regions with baseline coverage above 80 per cent further supports the hypothesis that positive employment effects are concentrated in developing contexts. Limitations include the reliance on provider-reported coverage data, which may contain measurement errors, and the use of large sub-national administrative regions that may mask within-region heterogeneity in rollout and labour market adjustments.

Conclusion

The research concludes that mobile internet expansion does not generate uniform labour market gains. Its effects depend critically on a country’s stage of digital diffusion, economic development, and existing labour market structures. While expanding digital infrastructure remains essential in lower-income regions, it must be embedded in a broader strategy. Recommendations include implementing complementary policies to strengthen digital skills, protect workers in vulnerable employment, and address persistent gender gaps in device access and literacy. Rollout alone is insufficient to ensure equitable outcomes; instead, it must be accompanied by measures that translate connectivity into better, more secure jobs for all segments of the population.