![]() ![]() The survey also includes an experimental module that randomized scenarios between respondents to understand how different federal policies might impact these firms’ behavior and survival as the crisis unfolds. Some questions were only displayed based on skip logic, so most participants responded to fewer questions. The survey included a total of 43 questions, with basic information about firm characteristics (including firm size and industry), questions about the current response to the COVID-19 crisis, and beliefs about the future course of the crisis. loan) may be less important than making sure that funding is rapidly available with little administrative complexity. Another important take-away of our work is that, during liquidity crunches with significant cash flow disruptions, the form of cash injection (e.g., grant vs. While some of these workers will surely find new jobs, these projections suggest that the scale of job dislocation could be larger than anything America has experienced since the Great Depression and larger than the impact of the 1918 influenza epidemic ( 6– 8). We estimate that closures alone might lead to 32.7 million job losses if the crisis lasts for 4 mo and 35.1 million job losses if the crisis lasts for 6 mo. ![]() Our results highlight the role the length of the crisis will play in determining its ultimate impact, which policy makers should consider as they contemplate the scale of the required interventions. Our results provide a unique snapshot into business decisions and expectations at that time, while offering insight for policy designed to aid the recovery. Our survey was conducted during a period of substantial policy uncertainty and before any federal response had been enacted. The fate of the 48% of American workers who work in small businesses is closely tied to the resilience of the small business ecosystem to the massive economic disruption caused by the pandemic. Overall, our paper contributes to our understanding of the economic impact of COVID-19 on the small business ecosystem. Impacts also varied across industries, with retail, arts and entertainment, personal services, food services, and hospitality businesses all reporting employment declines exceeding 50% in contrast, finance, professional services, and real estate-related businesses experienced less disruption, as these industries were better able to move to remote production. The decline was particularly sharp in the Mid-Atlantic region (which includes New York City), where 54% of firms were closed and employment was down by 47%. ![]() On average, the businesses reported having reduced their active employment by 39% since January. Respondents that had temporarily closed largely pointed to reductions in demand and employee health concerns as the reasons for closure, with disruptions in the supply chain being less of a factor. Across the full sample, 43% of businesses had temporarily closed, and nearly all of these closures were due to COVID-19. The results suggest that the pandemic had already caused massive dislocation among small businesses just several weeks after its onset and prior to the availability of government aid through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Using experimental variation, we also assess take-up rates and business resilience effects for loans relative to grants-based programs. However, many anticipated problems with accessing the program, such as bureaucratic hassles and difficulties establishing eligibility. Fourth, the majority of businesses planned to seek funding through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Third, many small businesses are financially fragile: The median business with more than $10,000 in monthly expenses had only about 2 wk of cash on hand at the time of the survey. Moreover, businesses had widely varying beliefs about the likely duration of COVID-related disruptions. Second, the risk of closure was negatively associated with the expected length of the crisis. First, mass layoffs and closures had already occurred-just a few weeks into the crisis. To explore the impact of coronavirus disease 2019 (COVID-19) on small businesses, we conducted a survey of more than 5,800 small businesses between March 28 and April 4, 2020.
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