Economists have begun to study the effects of the Paycheck Protection Program, on which Congress spent about half a trillion dollars. The results so far do not look good. Chetty et al. write:We therefore conclude that the PPP had little material impact on employment at small businesses: we cannot rule out a small positive employment effect of the program (of e.g., 3-4 pp on employment rates), but it is clear that the program did not restore the vast majority of jobs that were lost following the COVID shock.The study by Autor et al. has a more positive tone. But notice this sentence, deep in the bowels of the paper:Our benchmark estimates imply that each job supported by the PPP cost between $162K and $381K through May 2020, with our preferred employment estimate implying a cost of $224K per job supported.This estimate of cost per job suggests that the program was not a good use of public funds. I am not surprised. That is why, early on, I suggested that fiscal responses should focus on helping people rather than propping up businesses, as in this proposal of mine.
The High Cost of PPP Jobs
