Overview of chapter 2—Households: Welfare Effects of Digital Technologies Overview of chapter 3—Enterprises: Innovation for Better Jobs for

OVERVIEW OF CHAPTER 2—HOUSEHOLDS: WELFARE EFFECTS OF DIGITAL TECHNOLOGIES

To take advantage of digital technologies, households first need to adopt them. uptake is influenced by a range of factors both at the individual level—including income, education, area of residence, and other socioeconomic characteristics— and at the country level, for example, coverage and prices of DTs.

During the past decade, Senegal has achieved progress in expanding broadband coverage; however, the affordability, use, and quality of services remain relatively low. Whereas Sub-Saharan Africa is the region with the lowest internet penetration in the world (18.7 percent), Senegal’s penetration, at 29.6 percent, is relatively high; yet it remains behind the global average of 49 percent.5 According to the global System for Mobile Communications Association (gSMA), Senegal’s unique mobile internet connections rate, at 31 percent of the population in 2019, lags behind regional leaders, such as ghana and South Africa, and is far behind high performers in other regions. The mobile broadband cost to households—at 3.1 percent of monthly income in 2019 for a data-only package—lies slightly above the levels established by the Broadband Commission for Sustainable Development at less than 2 percent of monthly income. The quality of service is low, while both broadband density and internet bandwidth lag behind regional comparators such as Côte d’Ivoire, ghana, and nigeria.

At the household and individual levels, the main factors determining mobile internet adoption include household income (measured by consumption per capita), price of mobile internet, age, gender, tertiary education, language, living in an urban area, employment sector, asset ownership, and access to electricity. Increasing monthly per capita expenditures on average by CfAf 40,000 (about uS$72)6 per year (equivalent to 1 standard deviation) would increase mobile internet adoption by 9.3 percentage points. The affordability of mobile internet services also plays a role: an average decline in the monthly price of mobile internet of CfAf 1,100 (uS$2.00) (equivalent to 1 standard deviation) would increase adoption by 2.0 percentage points. The evidence also points to gaps across socioeconomic groups. Being a woman lowers the likelihood of adoption by 6 percentage points, while having tertiary education or higher increases this probability by 16 percentage points. Individuals ages 25–40 years are 21 percentage points more likely to have access to mobile internet—and so are those living in urban areas (by 4.0 percentage points), reflecting the existence of a rural/urban divide. These findings highlight the need for gender, skill, age, and location-specific approaches to promote DT adoption. language also matters, because individuals who can read and write in french are 13 percentage points more likely to access the internet through their mobile phones. In addition, complementary analysis using rIA data finds that online social networks appear to be an important driver of uptake: an increase from one to five in the number of friends who use messaging applications is associated with a rise in the adoption probability from 2.5 percent to 37 percent.

Once households or individuals adopt DTs, these technologies can have important effects on welfare. As shown in figure O.3, mobile internet coverage in Senegal is associated with a 14 percent higher total consumption (and about 26 percent higher nonfood consumption) for covered households, as well as with a 10 percent lower extreme poverty rate. These results are in line with those of a recent study based on more detailed panel data from nigeria, which finds a 9 percent increase in consumption and a nearly 7 percentage point