MIT Sloan School of Management
Institutional Affiliation: Massachusetts Institute of Technology
NBER Working Papers and Publications
|May 2020||Did the Paycheck Protection Program Hit the Target?|
with , , : w27095
This paper provides a comprehensive assessment of financial intermediation and the economic effects of the Paycheck Protection Program (PPP), a large and novel small business support program that was part of the initial policy response to the COVID-19 pandemic in the US. We use loan-level microdata for all PPP loans and high-frequency administrative employment data to present three main findings. First, banks played an important role in mediating program targeting, which helps explain why some funds initially flowed to regions that were less adversely affected by the pandemic. The top-4 banks alone account for 36% of total pre-policy small business loans, but disbursed less than 3% of all PPP loans in the first round of funding. Second, we exploit regional heterogeneity in lending relation...