How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey

Alexander Bartik (), Marianne Bertrand, Zoe Cullen (), Edward Glaeser (), Michael Luca () and Christopher Stanton ()
Additional contact information
Zoe Cullen: Harvard Business School
Edward Glaeser: Harvard University - Department of Economics and NBER
Michael Luca: Harvard Business School and NBER
Christopher Stanton: Harvard Business School

No 2020-42, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: In addition to its impact on public health, COVID-19 has had a major impact on the economy. To shed light on how COVID-19 is affecting small businesses – and on the likely impact of the recent stimulus bill, we conducted a survey of more than 5,800 small businesses. Several main themes emerge from the results. First, mass layoffs and closures have already occurred. In our sample, 43 percent of businesses are temporarily closed, and businesses have – on average –reduced their employee counts by 40 percent relative to January. Second, consistent with previous literature, we find that many small businesses are financially fragile. For example, the median business has more than $10,000 in monthly expenses and less than one month of cash on hand. Third, businesses have widely varying beliefs about the likely duration of COVID related disruptions. Fourth, the majority of businesses planned to seek funding through the CARES act. However, many anticipated problems with accessing the aid, such as bureaucratic hassles and difficulties establishing eligibility.

JEL-codes: E65 L20 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2020
New Economics Papers: this item is included in nep-hea and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (318)

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Working Paper: How Are Small Businesses Adjusting to COVID-19? Early Evidence from a Survey (2020)
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