The Effects of Broadband Deployment in Rural Areas: Evaluating the Connect America Fund Program

This paper estimates the effect of broadband deployment in unserved rural areas in the United States through Connect America Fund (CAF) Phase-II. CAF is a large-scale program sponsored by the Federal Government that subsidizes companies to provide service to unserved or underserved areas, of which Phase-II is its largest component. We take advantage of the lagged implementation of Phase-II as a natural experiment and rely on difference-in-differences estimations to evaluate the impacts of broadband availability on employment rates of rural areas. Preliminary results suggest an overall positive effect on employment rates, however, varying substantially by region.