The more than $500 billion in forgivable Paycheck Protection Loans from the government to small businesses helped save between 1.4 million and 3.2 million jobs through the first week of June, according to a preliminary study by economists at the Massachusetts Institute of Technology and Federal Reserve.
The researchers noted that assessing the impact of the loan program was made more difficult by “the absence of granular, high-frequency employment data that can precisely capture any causal effect of the PPP on employment.”
They used data from payroll-processing company Automatic Data Processing to compare employment levels at businesses that were and were not eligible for PPP loans. They estimate that the program boosted employment at eligible firms by 2% to 4.5%.
An earlier working paper by researchers at Harvard and Brown Universities using different data concluded that “the PPP had little material impact on employment at small businesses” and that “it is clear that the program did not restore the vast majority of jobs that were lost following the COVID shock.”