The Paycheck Protection Program saved up to 3.2 million jobs during the coronavirus pandemic, study says

Crystal Cox/Business Insider
  • The Paycheck Protection Program increased US employment by 1.4 million to 3.2 million from its inception to the first week of June, Federal Reserve and MIT researchers said in a study.
  • Loans made through the program also lifted employment at eligible small businesses by 2% to 4.5%, the preliminary study said.
  • While PPP faced initial criticism for vague forgiveness rules and take-up by large companies, the researchers found key economic aid was ultimately delivered “to a substantial number of small and mid-size firms.”
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Loans made through the Paycheck Protection Program saved between 1.4 million and 3.2 million jobs during the coronavirus pandemic, Federal Reserve and MIT researchers said in a study published Wednesday.

The program also lifted employment at eligible small businesses by 2% to 4.5%, according to the preliminary study. The researchers used ADP hiring data in their report and tracked hiring through the first week of June. Future reports will use loan-level PPP data to better detail the relationship between program participation and employment, the team wrote.

The study suggests PPP loans were largely effective at keeping employment steady at small businesses, quashing some fears that firms wouldn’t take up the relief.


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The program is a key element of the White House’s response to the pandemic and its economic toll. PPP loans to small businesses are forgivable if firms maintain payroll and wages near pre-pandemic levels. Roughly $US660 billion has been allocated to the program, though about $US130 billion was left in the program when it was renewed at the start of July.

PPP faced widespread criticism during its rollout. Many said it was too vague in laying out its criteria for loan forgiveness, and others knocked the program for not adequately aiding some industries like restaurants. Experts also knocked the program soon after its opening when several large, publicly traded companies were able to acquire PPP loans.

Still, the loans were largely successful in stemming economic damage considering the program’s massive size and rapid development, the team said.

“The evidence to date suggests the PPP was certainly not perfectly targeted in terms of reaching only firms or regions in the most need,” the researchers wrote. “Even so, it was delivered to a substantial number of small and mid-size firms, many of which were likely facing acute liquidity needs.”


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