Digital Divide: From Computer Access to Online Activities–A Micro Data Analysis

This study addresses issues of digital divide among households and individuals by using micro-data analysis of ICT usage patterns.  The analysis includes data from  18 European countries (2008), Korea (2008)  and Canada (2007). Inequalities in computer and Internet use are analysed in a two-step approach. First, the paper tries to better quantify and understand the factors that separate the ‘haves’ and the ‘have-nots’. Second, it tries to explain observed differences in the frequency and type of Internet use as a result of the socio-economic characteristics of households and individuals.

The study applies logistic regression and multi-linear regression models to measure the influence of one variable while controlling for the other variables. In particular, age, gender, educational attainment, employment situation, geographical location, household income and composition are used to explain the observed differences in computer and Internet access and use (first part) and Internet frequency of use, selected Internet activities, and Internet scope of use (second part).

The study proves the feasibility of performing micro data analysis of surveys of ICT usage in  households and by individuals. It shows that:

Low income is the single most important factor for non access to a computer and to the Internet. On average, the odds that a high-income household in Europe has access to a computer and to the  Internet are over 4 times higher than for a low-income household.

The presence of children is the second most important factor for the access to a computer and to  the Internet: on average, the odds for a household with one or more children in Europe are up to 3.9 times higher than for a household without children.

Living in a town in Europe increases the odds to have access to a computer and to the Internet by  over 30% as compared to living in the countryside.

Age and economic inactivity are by far the most important factors for having never used a  computer or the Internet. The odds are over 4 times higher for European inhabitants aged 65-74 years and up to 2.6 times for those out of the labour force. (Low) income, gender (female) and (lack of) children do play a role but their effect is smaller.

Becoming unemployed is the most important factor for stopping using the Internet. The odds that a European inhabitant has not used the Internet over the last 3 months are about 2 times higher if he is unemployed or out of the labour force.

Education is the most important  determinant of the intensity of Internet use. The odds that an individual uses the Internet everyday increases by 2.4 times in Europe and by 3.6 times in Korea if he has a university degree and above.

Being a student is the second most important determinant of the intensity of Internet use – the odds that a student uses the Internet every day are 2 times higher both in Europe and in Korea.

The third factor explaining the intensity of Internet use is income in Europe (the  odds are  over 70% higher for the high-income households) and broadband access in Korea (the odds are  2 times higher for households with a broadband connection).

Young age and higher education are the main determinants for the scope of Internet use in Canada, Europe and Korea.

Montagnier, P. and A. Wirthmann (2011), “Digital Divide: From Computer Access to Online Activities – A Micro Data Analysis”, OECD Digital Economy Papers, No. 189, OECD Publishing.OECD Digital Economy Papers.No. 189

Digital Divide: From Computer Access to Online Activities – A Micro Data Analysis

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Korea.LAC Investment and Trade Facilitation Initiative

The main objective is to strengthen the trade, investment and technology relationship between Korea and LAC countries.

IDB.RG-T2065 : Korea- LAC Investment and Trade Facilitation Initiative

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Korea Breaking the Mold of the Asia-Latin America Relationship

China’s meteoric emergence in the last decade and its profound impact on the economic performance of Latin America and the Caribbean (LAC) has eclipsed the importance of the region’s other Asian partners. Yet, LAC‘s governments can only ignore them at their own peril. These countries remain a major source of opportunities for trade and investment and Korea is a case in point. It has a one trillion dollar economy, with an impressive growth record (a 7% annual average growth since the early 1960s) and a population of nearly 49 million, sitting on a very limited pool of natural resources.

It is clearly another important market for the region’s commodities, but not just that. The complementarity between the two economies goes beyond natural resources and extends to the manufacturing sector, where Korea has already upgraded beyond labor-intensive and basic capital-intensive sectors, offering less of a competitive threat to the bulk of LAC’s industries. At the same time, its US$ 20 thousand per capita income offers opportunities for more sophisticated and diversified exports, something that is already visible in the current pattern of bilateral trade, which is one of the most diversified among LAC’s Asian partners.

Korea is also an important source of foreign direct investment with a worldwide stock of approximately US$120 billion, US$ 20 billion of which was invested just in 2010. LAC has been one of the beneficiaries of these flows, accounting for a still small but growing share of the total. Breaking with the pattern of other Asian investments, manufacturing has frequently been the target of Korea’s investments in the region, providing the basis for a more balanced and diversified relationship.

Apart from trade and investment, Korea is also a major source for policy lessons, which can be drawn from its remarkable and no less than spectacular growth trajectory. In less than 30 years, the country went from a broken-down economy, ravaged by civil war and with half of the per capita income of the average developing country, to a highly sophisticated developed economy exporting a wide array of technology-intensive products and backed by a highly educated workforce and a world class private sector. This report draws attention to these opportunities and the challenges of fully exploiting them.

It highlights the fact that there is more to Asia than just China and that the relationship with Korea has the contours of what can be a model for a sustainable Asian-LAC relationship. But it also points to the obstacles that still hold back bilateral trade—currently standing at US$ 44 billion or only 2.5% of LAC’s trade—and that call for decisive action to address both traditional and non-traditional trade barriers. More trade will bring more investment and more cooperation, which eventually, in a virtuous circle, would create even more opportunities to trade.

Korea Breaking the Mold of the Asia-Latin America Relationship