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Journal Publication

Information frictions and access to the Paycheck Protection Program

Published: April 2020
Researchers aimed to understand barriers to access of forgivable loans offered through the Paycheck Protection Program during the COVID-19 pandemic.

Using new daily survey data on small businesses in the U.S., researchers found that lack of information and the structure of the PPP program resulted in higher incidence of successful loan applications for larger firms, an effect that potentially permanently negated the program's effectiveness. Small businesses reported applying for the program later, a disadvantage in the "first come, first served" structure of the PPP, and reported fewer successful applications. Researchers purport that this may have had a real impact small businesses given that businesses that received aid report fewer layoffs, higher employment, and improved expectations about the future.

Abstract and Citation

John Eric Humphries, Christopher A. Neilson, Gabriel Ulyssea, Information frictions and access to the Paycheck Protection Program, Journal of Public Economics, Volume 190, 2020, 104244, ISSN 0047-2727,