Hires and Separations During the COVID-19 Crisis by Firm Size

Abstract

Understanding the labor market from this lens is relevant for several reasons. First, eligibility for Paycheck Protection Program (PPP) loans during the peak of the pandemic relied on firm size. Firms with more than 500 employees were ineligible for PPP loans, so to understand the employment effects of this program, it is important to analyze the changes in employment across firms that were and were not eligible. Second, unlike the Great Recession, the COVID-19 crisis hit small firms harder—especially those in the service sector affected by containment measures at the onset of the pandemic—since they typically have a smaller financial cushion. Thus, negative effects associated with this period were typically larger for small firms. Finally, previous research has shown that workers Hires and Separations During the COVID-19 Crisis by Firm Size