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Press Release

Did the Paycheck Protection Program Help Local Labor Markets?

Paycheck Protection Program loans helped cushion the blow from the pandemic-induced recession, Cleveland Fed researchers found in a new report.

In the Economic Commentary "PPP Loans & State-level Employment Growth," Cleveland Fed researchers Murat Tasci, Bezankeng Njinju, and Hana Braitsch analyzed the effect of timely distribution of Paycheck Protection Program (PPP) loans granted beginning in March 2020 until early August 2020, and how such timing ultimately affected a state’s individual employment recovery.

“We find that PPP loans helped mitigate the negative impact of the pandemic-related recession on state-level employment growth,” say the researchers. “States that received most of their funding early in the loan period had smaller employment declines than did states who received comparable funds later in the period.”

State-level data suggest that PPP loans equivalent to an additional week of payroll kept the state-level employment declines lower by somewhere between 1.5 percentage points to 2.3 percentage points. Moreover, conditional on receiving the same amount, states that received the bulk of their overall PPP loans early on had much smaller net employment declines over the entire period, February through August 2020.

Read more: PPP Loans & State-level Employment Growth

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.218.1892