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  • Proceedings of the National Academy of Sciences

The Impact of COVID-19 on Small Business Outcomes and Expectations

By: Alexander Bartik, Marianne Bertrand, Zoë B. Cullen, Edward L. Glaeser, Michael Luca and Christopher Stanton
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Abstract

To explore the impact of COVID on small businesses, we conducted a survey of more than 5,800 small businesses between March 28 and April 4, 2020. Several themes emerged. First, mass layoffs and closures had already occurred—just a few weeks into the crisis. Second, the risk of closure was negatively associated with the expected length of the crisis. Moreover, businesses had widely varying beliefs about the likely duration of COVID-related disruptions. Third, many small businesses are financially fragile: the median business with more than $10,000 in monthly expenses had only about two weeks of cash on hand at the time of the survey. Fourth, the majority of businesses planned to seek funding through the CARES act. However, many anticipated problems with accessing the program, such as bureaucratic hassles and difficulties establishing eligibility. Using experimental variation, we also assess take-up rates and business resilience effects for loans relative to grants-based programs.

Keywords

COVID-19; Stimulus; CARES Act; Health Pandemics; Small Business; Surveys

Citation

Bartik, Alexander, Marianne Bertrand, Zoë B. Cullen, Edward L. Glaeser, Michael Luca, and Christopher Stanton. "The Impact of COVID-19 on Small Business Outcomes and Expectations." Proceedings of the National Academy of Sciences 117, no. 30 (July 28, 2020).
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About The Authors

Zoe B. Cullen

Entrepreneurial Management
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Michael Luca

Negotiation, Organizations & Markets
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Christopher T. Stanton

Entrepreneurial Management
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More from the Authors
  • What the Research Really Says about American Immigration, Book review of <i>Streets of Gold: America's Untold Story of Immigrant Success</i>, by Ran Abramitzky and Leah Boustan By: Michael Luca
  • Chime Solutions By: Shai Bernstein, William R. Kerr, Jim Matheson, Christopher Stanton and Ria Mazumdar
  • Complex Disclosure By: Ginger Zhe Jin, Michael Luca and Daniel Martin
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