The Evolving Impacts of COVID-19 on Small Businesses Since the CARES ACT


This note provides new evidence on how small business owners have been impacted by COVID-19, and how these effects have evolved over time since the passage of the CARES Act. As part of a broader and ongoing project, we collected survey data from more than 8,000 small business owners in the U.S. from March 28th, one day after the CARES Act was passed, through April 20th. The data include information on their firm size, layoffs, beliefs about the future prospects of their businesses, as well as their awareness of existing government relief programs. We provide three main findings. First, by the time the CARES Act was passed, surveyed small business owners were already severely impacted by COVID-19-related disruptions, with 60% having laid of workers. Second, business owners’ expectations about the future are in general negative and have continuously deteriorated throughout our study period, with 37% of respondents in the first week reporting that they did not expect to recover within 2 years, growing to 46% by the last week. Third, we show that the smallest businesses had the least awareness of government assistance programs, the slowest growth in awareness after the passage of the CARES Act, and never caught up with the larger businesses. The latter indicate that small businesses may have missed out on initial Paycheck Protection Program funds because of low baseline awareness and differential access to information relative to larger firms.

In the Press

The Economist 4/30/2020

The Economist Figure 1

Graphs From the Paper

  • Coauthors: John Eric Humphries, Gabriel Ulyssea
  • Published: Cowles Foundation Discussion Paper No. 2230
  • Date: 2020
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