Surfing Alone? The Internet and Social Capital: Evidence from an Unforeseeable Technological Mistake

Abstract

Does the Internet undermine social capital or facilitate inter-personal and civic engagement in
the real world? Merging unique telecommunication data with geo-coded German individuallevel data, we investigate how broadband Internet affects several dimensions of social capital.
One identification strategy uses panel information to estimate value-added models. A second
exploits a quasi-experiment in East Germany created by a mistaken technology choice of the
state-owned telecommunication provider in the 1990s that still hinders broadband Internet
access for many households. We find no evidence that the Internet reduces social capital. For
some measures including children’s social activities, we even find significant positive effects.

JEL-Code: Z130, J240.
Stefan Bauernschuster
Ifo Institute for Economic Research at the
University of Munich
Poschingerstrasse 5
Germany – 81679 Munich
bauernschuster@ifo.de
Oliver Falck
Ifo Institute for Economic Research at the
University of Munich
Poschingerstrasse 5
Germany – 81679 Munich
falck@ifo.de
Ludger Woessmann
Ifo Institute for Economic Research at the University of Munich
Poschingerstrasse 5
Germany – 81679 Munich
woessmann@ifo.de