The Racial and Spatial Impacts of the Paycheck Protection Program

T. William Lester and Matthew D. Wilson

Economic Development Quarterly, 2023, vol. 37, issue 3, 243-258

Abstract: The Paycheck Protection Program (PPP), with spending of nearly $800 billion, was the largest component in the United States’ economic response to the COVID-19 pandemic. The intention of the program was to provide emergency economic relief to small businesses and help them keep employees on their payroll. Critics of the PPP program feared that its reliance on private lending institutions would exacerbate racial and spatial injustice by mirroring existing inequalities in access to capital by race and across space. The authors compare PPP to existing residential and small business lending patterns, and test whether Black and Latinx neighborhoods were disadvantaged in receiving PPP loans. The authors find that majority Black and Latinx neighborhoods received disproportionately fewer PPP loans than majority White and Asian neighborhoods, but that policy changes during the third phase of the PPP resulted in better targeting of lending to lower-income areas, minority borrowers, and smaller businesses.

Keywords: Paycheck Protection Program; PPP; Economic Inequality; Economic Inclusion; Inequality (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/08912424231157693 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:ecdequ:v:37:y:2023:i:3:p:243-258

DOI: 10.1177/08912424231157693

Access Statistics for this article

More articles in Economic Development Quarterly
Bibliographic data for series maintained by SAGE Publications ().