Limits to capital: Assessing the role of race on the Paycheck Protection Program for African American farmers in America

The goal of this piece is to survey the developing and rapidly growing literature on the economic consequences of COVID‐19 and the governmental responses, and to synthetize the insights emerging from a very large number of studies. This survey: (i) provides an overview of the data sets and the techniques employed to measure social distancing and COVID‐19 cases and deaths; (ii) reviews the literature on the determinants of compliance with and the effectiveness of social distancing; (iii) mentions the macroeconomic and financial impacts including the modelling of plausible mechanisms; (iv) summarizes the literature on the socioeconomic consequences of COVID‐19, focusing on those aspects related to labor, health, gender, discrimination, and the environment; and (v) summarizes the literature on public policy responses.

Abstract Social‐distancing restrictions and health‐ and economic‐driven demand shifts from COVID‐19 are expected to shutter many small businesses and entrepreneurial ventures, but there is very little early evidence on impacts. This paper provides the first analysis of impacts of the pandemic on the number of active small businesses in the United States using nationally representative data from the April 2020 Current Population Survey—the first month fully capturing early effects. The number of active business owners in the United States plummeted by 3.3 million or 22% over the crucial 2‐month window from February to April 2020. The drop in active business owners was the largest on record, and losses to business activity were felt across nearly all industries. African‐American businesses were hit especially hard experiencing a 41% drop in business activity. Latinx business owner activity fell by 32%, and Asian business owner activity dropped by 26%. Simulations indicate that industry compositions partly placed these groups at a higher risk of business activity losses. Immigrant business owners experienced substantial losses in business activity of 36%. Female business owners were also disproportionately affected (25% drop in business activity). Continuing the analysis in May and June, the number of active business owners remained low—down by 15% and 8%, respectively. The continued losses in May and June, and partial rebounds from April were felt across all demographic groups and most industries. These findings of early‐stage losses to small business activity have important implications for policy, income losses, and future economic inequality.