Pouring the Paycheck Protection Program into Craft Beer: PPP Employment Effects in Service-Intensive Industries

Pivots in consumer demand during COVID-19 led to the development of the Paycheck Protection Program (PPP), providing small businesses with forgivable loans to keep workers on payroll. One of the more salient pivots was the shift away from eating and drinking places, which generated unprecedented swings in employment throughout the pandemic. This study links restricted microdata from the Colorado Quarterly Census of Employment and Wages to microdata on PPP loan recipients to assess whether the first round of the loan program effectively reduced unemployment rates in Colorado's craft beer industry. The results of a staggered difference-in-differences framework indicate immediate and longer-term positive and statistically significant effects of the loan program on employment outcomes, with employment effects ranging from 16.8-19.5%. These results emphasize the importance of understanding the loan program’s effectiveness among hard-hit primarily comprised of small businesses.