From the Abstract: "The Paycheck Protection Program (PPP) aimed to quickly deliver hundreds of billions of dollars of loans to small businesses, with the loans administered via private banks. In this paper, we use firm-level data to document the demand and supply of PPP funds. Using an instrumental variables approach, we find that PPP loans led to a 14 to 30 percentage point increase in a business's expected survival, and a positive but imprecise effect on employment. Moreover, the effects on survival were heterogeneous and highlight an important tradeoff faced by policymakers: while administering the loans via private banks allowed for rapid delivery of funds, it also limited the government's ability to target the funding - instead allowing pre-existing connections between businesses and banks to determine which firms would benefit from the program."
NBER Working Paper No. 27623; National Bureau of Economic Research Working Paper No. 27623
2020 Alexander W. Bartik, Zoe B. Cullen, Edward L. Glaeser, Michael Luca, Christopher T. Stanton, and Adi Sunderam. Posted here with permission. Documents are for personal use only and not for commercial profit.
National Bureau of Economic Research: https://www.nber.org/