Academic economists who have studied the Paycheck Protection Program have concluded that it has saved relatively few jobs and that, at a cost of more than half a trillion dollars, it has been far less efficient than other government efforts to help the economy.
David Autor, an M.I.T. economist, says the Paycheck Protection Program saved 1.4 million to 3.2 million jobs, Ben Casselman and Jim Tankersley report for The New York Times. Other researchers have offered broadly similar estimates, even as Treasury economists said in December that the program might have saved nearly 19 million jobs.
Given the program’s cost, saving jobs on the scale of a few million jobs doesn’t necessarily qualify as a success. Unemployment benefits also provide income, at far less expense, and programs like food assistance and aid to state and local governments pack a larger economic punch, according to many assessments.
“It’s just a really inefficient use of funds,” said Eric Zwick, an economist at the University of Chicago’s business school who has studied the program.
Many policy experts on Wall Street and in Washington say the program’s merits should be assessed instead on what it did to save businesses. On that basis, they say, it helped prevent a greater calamity and fostered economic healing.
“A major goal was to keep these businesses alive so that when the economy started to recover and then the economy reopened, there would be businesses around to hire unemployed workers,” said Michael R. Strain, an economist at the American Enterprise Institute, a conservative think tank. Preliminary evidence suggests that the program has succeeded by that metric, he said.
The debate over the program’s merits could shape the next round of aid. President Biden’s $1.9 trillion pandemic relief plan includes billions for small businesses, but no new money for the program. His aides are weighing what to do about funds already allocated.