Information frictions and access to the Paycheck Protection Program

• 成果类型: Article
• 署名作者: Humphries, John Eric; Neilson, Christopher A.; Ulyssea, Gabriel
• 署名单位: Yale University; Princeton University; University of Oxford
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2020.104244
• 发表日期: 2020
• 关键词: covid-19; Small business; information frictions; CARES Act

摘要

The Paycheck Protection Program (PPP) extended 669 billion dollars of forgivable loans in an unprecedented effort to support small businesses affected by the COVID-19 crisis. This paper provides evidence that information frictions and the first-come, first-served design of the PPP program skewed its resources towards larger firms and may have permanently reduced its effectiveness. Using new daily survey data on small businesses in the US., we show that the smallest businesses were less aware of the PPP and less likely to apply. If they did apply, the smallest businesses applied later, faced longer processing times, and were less likely to have their application approved. These frictions may have mattered, as businesses that received aid report fewer layoffs, higher employment, and improved expectations about the future. (C) 2020 Elsevier B.V. All rights reserved.