Do Technology Resources Influence Income Mobility? The Role of Regional and Caste Spillovers from Computer Ownership

How do technology resources such as ownership of computers help create equality of opportunity and income mobility? This is an important question because opportunity constraint, or the lack of opportunity equality, often manifests in low income mobility in many countries. This study addresses this question by examining the spillover effects of computer ownership of households in influencing household income mobility considering spatial proximity and social proximity. Drawing on our primary theoretical lens of knowledge spillovers, we hypothesize that a household experiences upward income mobility due to increased computer ownership among other households in spatial proximity in the region. Further, drawing on social capital theory, we hypothesize that a household experiences higher upward mobility due to increased computer ownership among other households in the region that are socially proximate or of the same caste as the focal household. Our empirical analysis of data from over 32,000 households across all states in India from two waves of Indian Human Development Survey (IHDS) in 2005 and 2011 conducted by National Council of Applied Economic Research in collaboration with University of Maryland (Desai & Vanneman, 2016; Desai et al., 2016) supports our hypotheses. Our exploratory analyses suggest that households in regions with high social harmony experience higher upward income mobility from increased computer ownership of other households in the region. We also find that increased computer ownership of other households in the region helps households of disadvantaged castes overcome their low income mobility. This study contributes by using the lens of spillovers bounded by social capital to show how the returns to computer ownership in terms of household upward income mobility go beyond private returns and spillover to other households in spatial proximity, particularly to households of the same caste with whom they enjoy social proximity. A key implication for policymakers that seek to foster equality of opportunity from technology resources is to create social harmony as a lever for facilitating income mobility, instead of a sole focus on technology resources alone.