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  4. May 2022
  5. The 2021 Paycheck Protection Program Reboot: Loan Disbursement to Employer and Nonemployer Businesses in Minority Communities

The 2021 Paycheck Protection Program Reboot: Loan Disbursement to Employer and Nonemployer Businesses in Minority Communities

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Abstract

We analyze how Paycheck Protection Program (PPP) funds were disbursed to minority communities in the $278 billion rebooted program in January 2021. Using administrative microdata covering all PPP loans, we find strong positive relationships between PPP loan flows to both employer and nonemployer businesses and the minority share of the population. In contrast, the relationships were negative in the 2020 first round and less positive in the 2020 second round. For employer businesses, the positive relationship was also stronger for first-draw loans than for second-draw loans. The PPP reboot appears to have been disbursed to minority communities as intended.

Citation

Fairlie, Robert, and Frank M. Fossen. 2022. "The 2021 Paycheck Protection Program Reboot: Loan Disbursement to Employer and Nonemployer Businesses in Minority Communities." AEA Papers and Proceedings, 112: 287-91. DOI: 10.1257/pandp.20221028

Additional Materials

JEL Classification

  • D22 Firm Behavior: Empirical Analysis
  • E32 Business Fluctuations; Cycles
  • E63 Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
  • J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination