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

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  • Robert Fairlie
  • Frank M. Fossen

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.

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  • Robert Fairlie & Frank M. Fossen, 2022. "The 2021 Paycheck Protection Program Reboot: Loan Disbursement to Employer and Nonemployer Businesses in Minority Communities," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 287-291, May.
    • Handle: RePEc:aea:apandp:v:112:y:2022:p:287-91
    DOI: 10.1257/pandp.20221028
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    References listed on IDEAS

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    1. Fairlie, Robert, 2020. "The Impact of COVID-19 on Small Business Owners: The First Three Months after Social-Distancing Restrictions," MPRA Paper 113127, University Library of Munich, Germany.
    2. Robert W. Fairlie & Alicia M. Robb, 2008. "Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States," MIT Press Books, The MIT Press, edition 1, volume 1, number 026206281x, December.
    3. Ströbel, Johannes & Howell, Sabrina & Kuchler, Theresa & Snitkof, David, 2021. "Racial Disparities in Access to Small Business Credit: Evidence from the Paycheck Protection Program," CEPR Discussion Papers 16623, C.E.P.R. Discussion Papers.
    4. Benjamin W. Cowan, 2020. "Short-run Effects of COVID-19 on U.S. Worker Transitions," NBER Working Papers 27315, National Bureau of Economic Research, Inc.
    5. Robert Fairlie, 2020. "The impact of COVID‐19 on small business owners: Evidence from the first three months after widespread social‐distancing restrictions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(4), pages 727-740, October.
    6. Raffi E. García & William A. Darity Jr., 2022. "Self-Reporting Race in Small Business Loans: A Game-Theoretic Analysis of Evidence from PPP Loans in Durham, NC," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 299-302, May.
    7. Laura Montenovo & Xuan Jiang & Felipe Lozano Rojas & Ian M. Schmutte & Kosali I. Simon & Bruce A. Weinberg & Coady Wing, 2020. "Determinants of Disparities in Covid-19 Job Losses," NBER Working Papers 27132, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Fairlie, Robert W., 2023. "The Impacts of COVID-19 on Racial Inequality in Business Earnings," IZA Discussion Papers 16412, Institute of Labor Economics (IZA).
    2. Robert Fairlie & Robert W. Fairlie, 2023. "The Impacts of Covid-19 on Racial Inequality in Business Earnings," CESifo Working Paper Series 10634, CESifo.
    3. Robert W. Fairlie, 2022. "The Impacts of COVID-19 on Racial Inequality in Business Earnings," NBER Working Papers 30532, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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