Pouring the Paycheck Protection Program into craft beer: PPP employment effects in service-intensive industries

Small businesses in the food and beverage service industry are particularly vulnerable to crises such as the COVID-19 pandemic. One of the most salient vulnerabilities was the drastic decline in consumer spending at eating and drinking places, generating unprecedented swings in employment in this service-intensive sector. Governments across the globe implemented rapid response fiscal policies to mitigate these economic damages and improve small business crisis management. One such policy was the Paycheck Protection Program (PPP) in the United States. This study links restricted microdata from the Colorado Quarterly Census of Employment and Wages to microdata on PPP loan recipients to assess whether 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 to 19.5%. These results emphasize the importance of understanding the loan program’s effectiveness among hard-hit industries comprised of small businesses.