THE ASYMMETRIC IMPACT OF DIGITAL INFRASTRUCTURE ON INCOME INEQUALITY: A PANEL QUANTILE REGRESSION ANALYSIS OF OECD COUNTRIES
THE ASYMMETRIC IMPACT OF DIGITAL INFRASTRUCTURE ON INCOME INEQUALITY: A PANEL QUANTILE REGRESSION ANALYSIS OF OECD COUNTRIES

Summary/Abstract: This study investigates the asymmetric effects of digital infrastructure on income inequality across OECD countries. Using an unbalanced panel, income inequality is represented by the Gini index of disposable income, and digital infrastructure by broadband internet usage, across a sample of 38 OECD member states covering the years 2010-2023. The empirical strategy combines fixed-effects panel quantile regression with preliminary estimation assessments that account for cross-sectional dependence and non-stationarity. Distributional estimates are analyzed using panel causality tests. The magnitude of the effect decreases towards the upper tail, becoming statistically insignificant at the 90th percentile (Q90). This suggests a limited equalization capacity in high-inequality regimes. Dumitrescu-Hurlin causality tests support a unidirectional relationship from digital infrastructure to income inequality. The findings demonstrate that infrastructure expansion alone is not enough to deliver inclusive distributional gains. They show that infrastructure investment is also correlated with digital inclusion, skills development, and the quality of governance.

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