Register for Lindsey Raymond's seminar, April 15th


Title: “Small Business Survival Capabilities and Policy Effectiveness”

Using unique City of Oakland data during COVID-19, we document that small business survival capabilities vary by firm size as a function of revenue resiliency, labor flexibility, and committed costs. Nonemployer businesses rely on low cost structures to survive 73% declines in own-store foot traffic. Microbusinesses (1-to-5 employees) depend on 14% greater revenue resiliency. Enterprises (6-to-50 employees) have twice-as-much labor flexibility, but face 11%-to-22% higher residual closure risk from committed costs. Finally, inconsistent with the spirit of ChettyFriedman-Hendren-Sterner (2020) and Granja-Makridis-Yannelis-Zwick (2020), PPP application success increased medium-run survival probability by 20.5%, but only for microbusinesses, arguing for size-targeting of policies.

Presenter: Adair Morse (University of California, Berkeley)

Coauthors: Robert P. Bartlett III (University of California at Berkeley)

Discussant: Christopher T. Stanton (Harvard Business School)