Educational inequalities Do they affect the relationship between Internet use and economic growth?

This paper examines the impact of Internet use on economic growth and the extent to which educational inequality modulates this impact for a panel data set of 94 countries between 1995 and 2010. We obtain a positive and significant impact of Internet use on economic growth and a negative influence of educational inequality on the Internet's impact on growth. When we disaggregate by income levels, the results indicate that Internet use is positively associated with economic growth for middle- and high-income countries. Educational inequality influences the impact of Internet use on economic growth only for middle- and low-income countries, although with the opposite sign. For middle-income countries, the impact is negative, while the impact is positive for low-income economies. The research provides evidence for the first time about how inequalities in education may limit the positive economic outcomes and benefits derived from the use of information and communication technologies.