RDP 2020-07: How Many Jobs Did JobKeeper Keep? Appendix A: Comparison of PPP and JobKeeper Programs
November 2020
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| Autor et al (2020) Paycheck Protection Program | Bishop and Day JobKeeper Payment (initial six months) | |
|---|---|---|
| Details of program | ||
| Structure | Forgivable loans issued by banks and guaranteed by the US government | Direct subsidies for payroll costs implemented by ATO |
| Replacement rate | Proportionate to pre-scheme payroll (100%, but with US$100,000 cap for each worker) | Varies based on worker's pre-scheme earnings |
| Generosity | 2.5 × the firm's pre-COVID-19 monthly payroll expenses up to a maximum of US$10m | A$1,500 per eligible employee per fortnight (also wage floor) |
| Duration | Funds cover 10 weeks of payroll; 60% of funds must be spent on payroll over 24 weeks; headcount/compensation tests apply on 31 Dec 2020 | 26 weeks |
| Start date | 3 Apr 2020 | 30 Mar 2020 |
| Cost | US$518b (2.4% of 2019 GDP), as of 17 Jul 2020 | A$70b (3.5% of 2019 GDP) |
| Firm eligibility | Firm had 500 or fewer employees (higher threshold for some industries) | Firms experienced a specified revenue loss that depended on their size |
| Worker eligibility | na | Australian resident employed at eligible firm on 1 Mar 2020; minimum of 12 months of tenure for casuals |
| Conditions (for loan forgiveness or payment of subsidy) | The amount of the loan used for payroll costs, rent, utilities and interest during the 24-week period (initially 8 weeks) after loan origination is forgiven, provided that 60% (initially 75%) of the amount forgiven is spent on payroll and the firm does not reduce headcount relative to pre-crisis levels or reduce any employee's compensation by more than 25% of their pre-crisis level(a) | The firm pays all eligible workers at least A$1,500 per fortnight for the duration of the firm's participation |
| Details of evaluation | ||
| Period of evaluation | Apr–Jun | Apr–Jul |
| Outcome variable | Firm-level employment (paid jobs) | Probability employee was employed (ABS definition) |
| Unit of analysis | Firms; those close to the size eligibility threshold (500 employees) | Casual employees; those close to the worker-eligibility threshold (12 months) |
| Data | Administrative panel data from a large payroll processing firm (ADP) | Survey panel data from LFS |
| Identification | Exploit firm-size eligibility cut-offs; compare firms above and below the cut-off using difference-in-differences | Exploit tenure-eligibility cut-offs; compare workers above and below the cut-off using difference-in-differences |
| Results of evaluation | ||
| Effect of program eligibility | 3.25%(b) | 7–10 ppt |
| Take-up rate (share of eligible population that participated) | 67% (midpoint of 62–72% range) |
33% |
| Treatment effect on treated | 4.85% | 20–30 ppt |
| Aggregate employment effect | 2.31m | 0.7m |
| Cost-per-job saved | US$224,000 (2.31m ÷ US$518b) | A$100,000 (0.7m ÷ A$70b) |
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Notes: (a) PPP loans allow employees to be furloughed and rehired before 31 December 2020 and remain eligible for loan forgiveness; share of loan forgiven is reduced proportionately if headcount/compensation are reduced beyond these levels Sources: Authors’ calculations; Autor et al (2020) |
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