All for one? The Paycheck Protection Program distribution disparity
Journal of Entrepreneurship and Public Policy
ISSN: 2045-2101
Article publication date: 22 June 2021
Issue publication date: 28 October 2021
Abstract
Purpose
Given the previous research on the disparities of lending rates and their relationship with lending institutions for women-owned and minority-owned businesses, the study poses the research question: How much Paycheck Protection Program (PPP) funding was distributed to women-owned and minority-owned businesses in comparison to other firms? Additionally, as the purpose of the PPP funding was to assist small businesses in retaining their workforce, the authors pose a second research question: Of those who received PPP funding, how many jobs on average were retained? And importantly related to our first research question, are there differences across gender and race in the average number of jobs retained?
Design/methodology/approach
This is one of the first empirical studies with an initial sample size of 661,218 loans from July 2020 that examines whether the United States PPP had the intended impact to save jobs in small businesses and to examine any reported differences across gender and race in loans issued and jobs saved.
Findings
The authors find that significant differences exist between women- and men-owned businesses across all five loan categories, with male-owned firms receiving over 80% of PPP loans. However, women-owned firms saved more jobs on average across all but the largest loan category. Significant differences were also found between minority- and White-owned businesses with minority-owned businesses generally saving more jobs on average across most loan categories.
Research limitations/implications
A limitation of this study pertains to certain missing data that were not reported by participants. While a participant may have included their gender, they may not have included their race. Therefore, the varying sets of data may not be a reflection of the same individuals. Additionally, the industries were not included in this analysis, which may shed light on the job creation differences across gender and race.
Practical implications
Many of the industries that have been significantly impacted have been the tourism, restaurant and hospitality sectors, and knowing “where the money was allocated” can assist policymakers in allocating additional funds to those businesses, especially those who did not receive funding in the initial first waves of PPP.
Originality/value
This is one of the first empirical studies that examine over 600,000 loans and found that women-owned firms saved more jobs across all loan categories except the largest loans. Significant differences were also found between minority- and White-owned businesses with minority-owned businesses generally saving more jobs on average across most loan categories.
Keywords
Citation
Kickul, J., Griffiths, M.D., Robb, C.C. and Gundry, L. (2021), "All for one? The Paycheck Protection Program distribution disparity", Journal of Entrepreneurship and Public Policy, Vol. 10 No. 3, pp. 323-335. https://doi.org/10.1108/JEPP-03-2021-0027
Publisher
:Emerald Publishing Limited
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