An Evaluation of the Paycheck Protection Program Using Administrative Payroll Microdata

David Autor, David Cho, Leland Crane, Mita Goldar, Byron Lutz, Joshua K. Montes, William Peterman, David D. Ratner, Daniel Villar Vallenas and Ahu Yildirmaz

No 29972, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Paycheck Protection Program (PPP), a principal element of the fiscal stimulus enacted by Congress during the COVID-19 pandemic, aimed to assist small businesses to maintain employment and wages during the crisis. We use high-frequency administrative payroll data from ADP--one of the world’s largest payroll processing firms--to estimate the causal effect of the PPP on the evolution of employment at PPP-eligible firms relative to PPP-ineligible firms, where eligibility is determined by industry-specific firm-size cutoffs. We estimate that the PPP boosted employment at eligible firms by between 2 percent to 5 percent at its peak in mid-2020, with this effect waning to 0 to 3 percent throughout the remainder of the year. Employers retained an estimated additional 3.6 million jobs due to the PPP as of mid-May 2020, and 1.4 million jobs at the end of 2020. The implied cost per year of employment retained was $169,000 to $258,000, equal to 3.4 to 5.2 times median earnings.

JEL-codes: E24 H25 H32 H81 J38 (search for similar items in EconPapers)
Date: 2022-04
New Economics Papers: this item is included in nep-lma, nep-mac and nep-pbe
Note: LS ME PE
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Published as David Autor & David Cho & Leland D. Crane & Mita Goldar & Byron Lutz & Joshua Montes & William B. Peterman & David Ratner & Daniel Villar & Ahu Yildirmaz, 2022. "An evaluation of the Paycheck Protection Program using administrative payroll microdata," Journal of Public Economics, vol 211.

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