The Paycheck Protection Program (PPP) provided small businesses with roughly $800 billion dollars in uncollateralized, low-interest loans during the pandemic, almost all of which will be forgiven. ...With 94 percent of small businesses ultimately receiving one or more loans, the PPP nearly saturated its market in just two months. We estimate that the program cumulatively preserved between 2 and 3 million job-years of employment over 14 months at a cost of $169K to $258K per job-year retained. These numbers imply that only 23 to 34 percent of PPP dollars went directly to workers who would otherwise have lost jobs; the balance flowed to business owners and shareholders, including creditors and suppliers of PPP-receiving firms. Program incidence was ultimately highly regressive, with about three-quarters of PPP funds accruing to the top quintile of households. PPP's breakneck scale-up, its high cost per job saved, and its regressive incidence have a common origin: PPP was essentially untargeted because the United States lacked the administrative infrastructure to do otherwise. Harnessing modern administrative systems, other high-income countries were able to better target pandemic business aid to firms in financial distress. Building similar capacity in the U.S. would enable improved targeting when the next pandemic or other large-scale economic emergency inevitably arises.
For emerging markets, fiscal space is a very real constraint that can surface under a variety of circumstances, including rising world interest rates, falling commodity prices, or a global recession. ...Some emerging markets, and the majority of low-income developing economies, are already in debt distress or default. Near-term, making sure that troubled debtor countries are aware of the full menu of options, including heterodox strategies such as default, is important. Longer-term, a rethink of the Bretton Woods financial institutions to incorporate a greater emphasis on outright grants instead of loans, makes more sense than ever.
This article discusses the question of data and our perspective on the importance of public, accessible, and contemporaneous data in the face of public crisis. Then, we present data on the extent of ...school closures during the COVID-19 pandemic, both globally and within the United States. We describe the available data on the degree of these closures, which will provide a set of resources for studying longer-term consequences as they emerge. We also highlight what we know about the demographic patterns of school closures. We then discuss the emerging estimates of the short-term impacts of school closures. A central finding throughout our discussion is that school closures during the pandemic tended to increase inequality, both within and across countries, but that fully understanding the long-run impact of COVID-related school closures on students will take time and will surely be influenced by events and policies in the next few years.
Short‐time work (STW) is a policy measure whose prominence increases during economic crises and is intended to stabilize the labor market. Employers can temporarily reduce employees' working hours, ...which are in turn paid by the social security system in the meantime. Although short‐time work—by design—saves employers a fraction of their wage costs, little is known about free riding behavior when using this option. Accordingly, we analyze the employee‐reported free riding experience with respect to longer actual working hours than accounted for in employees' short‐time work allowances, the unchanged workloads experienced by these employees, and announced lay‐off decisions. Since these questions are certainly sensitive, we employ the crosswise model, a privacy‐preserving technique, in a random half of the sample. Our results show significant employee‐reported prevalences across all dimensions and a significant association between free riding and workers' job dissatisfaction. These findings thus highlight the importance of the crosswise model in uncovering these findings and demonstrate a specific drawback in the application of short‐time work.
The paper focuses on modeling of public health measures to control the COVID‐19 pandemic. The authors suggest a flexible integral model with distributed lags, which realistically describes COVID‐19 ...infectiousness period from clinical data. It contains susceptible–infectious–recovered (SIR), susceptible–exposed–infectious–recovered (SEIR), and other epidemic models as special cases. The model is used for assessing how government decisions to lockdown and reopen the economy affect epidemic spread. The authors demonstrate essential differences in transition and asymptotic dynamics of the integral model and the SIR model after lockdown. The provided simulation on real data accurately describes several waves of the COVID‐19 epidemic in the United States and is in good correspondence with government actions to curb the epidemic.
This paper extends Meenagh and Minford (2021) to the four waves of infection in the UK by end-2021, using the unique newly available sample-based estimates of infections created by the ONS. These ...allow us to estimate the effects on the Covid hospitalization and fatality rates of vaccination and population immunity due to past infection: the latter was the most significant factor driving both trends, while the vaccination rate also had a significant short-run effect on the fatality rate. We also updated our policy comparison with Sweden for the most recent data, with similar conclusions: lower Swedish lockdown intensity relative to personal response in waves 1 and 2 caused much lower economic costs with no discernible effect on infections.
Enacted March 27, 2020, the Paycheck Protection Program (PPP) was the most ambitious and creative fiscal policy response to the pandemic recession in the United States. PPP offers forgivable ...loans—essentially grants—to businesses with 500 or fewer employees that meet certain requirements. In this paper, we present evidence that PPP has substantially increased the employment, financial health, and survival of small businesses, using data from Dun & Bradstreet, Inc. We use event studies and standard difference-in-differences models to estimate the effect of a small business applying for larger PPP loans and of a small business being eligible for PPP based on size. While our findings are informative, we believe it is too early to issue conclusive judgment on PPP’s success. We offer lessons for the future from the PPP experience thus far.
A model of private and public behavior to mitigate disease transmission during the COVID-19 pandemic over the past year in the United States addresses two questions: What dynamics of infections and ...deaths should we expect to see from a pandemic? What are our options for mitigating the impact of a pandemic on public health? I find that behavior turns what would be a short and extremely sharp epidemic into a long, drawn-out one, with, at best, a modest impact on the long-run death toll from the disease. Absent the development of a technological solution, such as vaccines or life-saving therapeutics, additional public health interventions suffer from rapidly diminishing returns in improving long-run outcomes. In contrast, rapidly implemented non-pharmaceutical interventions, in combination with the rapid development of technological solutions, could have saved nearly 300,000 lives relative to what is now projected as of mid-June 2021 to occur over the long run.
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