How Seniors Will Benefit from Broadband

Michael Mandel

A very interesting new paper by Bob Litan lays out the economic benefits of providing broadband connections to senior citizens and disabled Americans.

Though it is widely understood that broadband technologies that allow rapid and “always on” connections to the Internet will provide significant benefits to the U.S. economy, this report is the first to estimate the economic benefits to the nation due to cost savings and output expansion resulting from the use of broadband technologies for an important specific sub-group of the U.S. population: the roughly 70 million Americans who are over 65 or under that age but have disabilities.

Three types of benefits from broadband deployment and use are addressed: lower medical costs; lower costs of institutionalized living; and additional output generated by more seniors and individuals with disabilities in the labor force. Considered together, these three benefits are estimated to accumulate to at least $927 billion in cost savings and output gains in 2005 dollars (with future benefits discounted for the “time value of money”) over the 25 year period, 2005 to 2030. This amount is equivalent to half of what the United States currently spends annually for medical care for all its citizens ($1.8 trillion). As large as these benefits may appear, they are line with previous estimates for the benefits of broadband for the population as a whole.

Policies designed to accelerate the use of broadband for these populations,however, could significantly add to the benefits, by cumulative amounts ranging from $532 billion to $847 billion (depending on the wages earned by the additional working seniors). The policy benefits are as substantial as what the federal government is likely to spend on homeland security over the next 25 years. Total cumulative benefits, under the right set of policies, could exceed what the United States currently spends annually for health care for all its citizens.

From "Great Expectations: Potential Economic Benefits to the Nation From Accelerated Broadband Deployment to Older Americans and Americans with Disabilities" by Robert Litan (New Millenium Research Council)

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