Has the Paycheck Protection Program Succeeded?

Summary

An NBER Working Paper 28032, “Has the Paycheck Protection Program Succeeded?” by R. Glenn Hubbard and Michael R. Strain, with an Issue Date of October 2020. The abstract says the Paycheck Protection Program, enacted March 27, 2020, offers forgivable loans to businesses with 500 or fewer employees that meet certain requirements. Using data from the Dun & Bradstreet Corporation, the authors present evidence that the program has substantially increased the employment, financial health and survival of small businesses. The abstract adds that it is too early to issue conclusive judgment on the success of PPP. A listed published version appeared in Brookings Papers on Economic Activity, vol 2020(3), pages 335-390.

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Has the Paycheck Protection Program Succeeded?

R. Glenn Hubbard & Michael R. Strain

Working Paper 28032

DOI 10.3386/w28032

Issue Date October 2020

Enacted March 27, 2020, the Paycheck Protection Program (PPP) was the most ambitious and creative fiscal policy response to the Pandemic Recession in the United States. PPP offers forgivable loans — essentially grants — to businesses with 500 or fewer employees that meet certain requirements. In this paper, we present evidence that PPP has substantially increased the employment, financial health, and survival of small businesses, using data from the Dun & Bradstreet Corporation. We use event studies and standard difference-in-difference models to estimate the effect of a small business applying for larger PPP loans and of a small business being eligible for PPP based on size. While our findings are informative, we believe it is too early to issue conclusive judgment on PPP’s success. We offer lessons for the future from the PPP experience thus far.

- Copy Citation R. Glenn Hubbard and Michael R. Strain, "Has the Paycheck Protection Program Succeeded?," NBER Working Paper 28032 (2020), https://doi.org/10.3386/w28032. Download Citation

Published Versions

Glenn Hubbard & Michael R. Strain, 2020. " Has the Paycheck Protection Program Succeeded?, " Brookings Papers on Economic Activity, vol 2020(3), pages 335-390. citation courtesy of

Related

Topics

Macroeconomics

Consumption and Investment

Fiscal Policy

Public Economics

Taxation

COVID-19

Programs

Economic Fluctuations and Growth

Monetary Economics

Public Economics

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