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

Author

Listed:
  • 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.

Suggested Citation

  • 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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    Cited by:

    1. Robert Fairlie, 2024. "The impacts of COVID‐19 on racial inequality in business earnings," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 43(1), pages 258-288, January.
    2. Fulvia Fringuellotti & Thomas Kroen, 2024. "Payout Restrictions and Bank Risk-Shifting," Staff Reports 1123, Federal Reserve Bank of New York.
    3. Congregado, Emilio & Fossen, Frank M. & Rubino, Nicola & Troncoso, David, 2024. "Long-Term Effects of Shocks on New Opportunity and Necessity Entrepreneurship," IZA Discussion Papers 16930, IZA Network @ LISER.
    4. Iryna Demko & Ana Claudia Sant’Anna, 2023. "Impact of Race, Ethnicity, and Gender on the SBA Paycheck Protection Program (PPP) Loan Amounts," Economic Development Quarterly, , vol. 37(3), pages 211-229, August.

    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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