Were small businesses more likely to permanently close in the pandemic?

Previous estimates indicate that COVID-19 led to a large drop in the number of operating businesses operating early in the pandemic, but surprisingly little is known on whether these shutdowns turned into permanent closures and whether small businesses were disproportionately hit. This paper provides the first analysis of permanent business closures using confidential administrative firm-level panel data covering the universe of businesses filing sales taxes from the California Department of Tax and Fee Administration. We find large increases in closure rates in the first two quarters of 2020, but a strong reversal of this trend in the third quarter of 2020. The increase in closures rates in the first two quarters of the pandemic was substantially larger for small businesses than large businesses, but the rebound in the third quarter was also larger. The disproportionate closing of small businesses led to a sharp concentration of market share among larger businesses as indicated by the Herfindahl-Hirschman Index with only a partial reversal after the initial increase. The findings highlight the fragility of small businesses during a large adverse shock and the consequences for the competitiveness of markets.

Minority student and teaching assistant interactions in STEM

Graduate student teaching assistants from underrepresented groups may provide salient role models and enhanced instruction to minority students in STEM fields. We explore minority student-TA interactions in an important course in the sciences and STEM - introductory chemistry labs - at a large public university. The uncommon assignment method of students to TA instructors in these chemistry labs overcomes selection problems, and the small and active learning classroom setting with required attendance provides frequent interactions with the TA. We find evidence that underrepresented minority students are less likely to drop courses and are more likely to pass courses when assigned to minority TAs, but we do not find evidence of effects for grades and medium-term outcomes. The effects for the first-order outcomes are large with a decrease in the drop rate by 5.5 percentage points on a base of 6 percent, and an increase in the pass rate of 4.8 percentage points on a base of 93.6 percent. The findings are similar when we focus on Latinx student - Latinx TA interactions. The findings are robust to first-time vs. multiple enrollments in labs, specifications with different levels of fixed effects, limited choice of TA race, limited information of TAs, and low registration priority students. The findings have implications for debates over increasing diversity among PhD students in STEM fields because of spillovers to minority undergraduates.

Did the Paycheck Protection Program and Economic Injury Disaster Loan Program get disbursed to minority communities in the early stages of COVID-19?

Social distancing restrictions and health- and economic-driven demand shifts from COVID-19 shut down many small businesses with especially negative impacts on minority owners. Is there evidence that the unprecedented federal government response to help small businesses-the Paycheck Protection Program (PPP) and the related COVID-19 Economic Injury Disaster Loans (EIDL)-which had a stated goal of helping disadvantaged groups, was disbursed evenly to minority communities? In this descriptive research note, we provide the first detailed analysis of how the 2020 PPP and EIDL funds were disbursed across minority communities in the country. From our analysis of data on the universe of loans from these programs and administrative data on employer firms, we generally find a slightly positive relationship between PPP loan receipt per business and the minority share of the population or businesses, although funds flowed to minority communities later than to communities with lower minority shares. PPP loan amounts per employee, however, are negatively related to the minority share of the population. The EIDL program, in contrast, both in numbers per business and amounts per employee, was distributed positively to minority communities.

The early impacts of the COVID-19 pandemic on business sales

Abstract

COVID-19 led to a massive shutdown of businesses in the second quarter of 2020. Estimates from the Current Population Survey, for example, indicate that the number of active business owners dropped by 22% from February to April 2020. We provide the first analysis of losses in sales among the universe of businesses in California using administrative data from the California Department of Tax and Fee Administration. Losses in taxable sales average 17% in the second quarter of 2020 relative to the second quarter of 2019 even though year-over-year sales typically grow by 3-4%. We find that sales losses were largest in businesses affected by mandatory lockdowns such as accommodations, which lost 91%, whereas online sales grew by 180%. Placing business types into different categories based on whether they were considered essential or nonessential (and thus subject to early lockdowns) and whether they have a moderate or high level of person-to-person contact, we find interesting correlations between sales losses and COVID-19 cases per capita across counties in California. The results suggest that local implementation and enforcement of lockdown restrictions as safety measures for public health and voluntary behavioral responses as reactions to the perceived local COVID-19 spread both played a role.

Plain English Summary

Business sales dropped by 17% on average due to the pandemic during the second quarter of 2020 in California. Accommodations lost 91% of sales, whereas online sales grew by 180%. Sales fell more steeply in counties with more COVID-19 cases. We examine how much businesses lost in sales using administrative sales tax data. The average losses of 17% in the second quarter of 2020 relative to the second quarter of 2019 occurred even though year-over-year sales typically grow by 3-4%. We find that sales losses were largest in businesses affected by mandatory lockdowns such as accommodations, drinking places, and arts, entertainment, and recreation. Distinguishing between essential and nonessential businesses, which were subject to early lockdowns, and by the level of person-to-person contact, we find that local implementation and enforcement of lockdown restrictions for public health safety and voluntary responses to the perceived local COVID-19 spread both played a role. The results suggest that small businesses may need more support from governments and consumers to mitigate the strong shift to online vendors, and that the pandemic must be brought under control as a prerequisite to a full recovery.

Supplementary Information

The online version contains supplementary material available at 10.1007/s11187-021-00479-4.

Instructional interventions for improving COVID-19 knowledge, attitudes, behaviors: Evidence from a large-scale RCT in India

Seeking ways to encourage broad compliance with health guidelines during the pandemic, especially among youth, we test two hypotheses pertaining to the optimal design of instructional interventions for improving COVID-19-related knowledge, attitudes, and behaviors. We randomly assigned 8376 lower-middle income youth in urban India to three treatments: a concentrated and targeted fact-based, instructional intervention; a longer instructional intervention that provided the same facts along with underlying scientific concepts; and a control. Relative to existing efforts, we find that both instructional interventions increased COVID-19-related knowledge immediately after intervention. Relative to the shorter fact-based intervention, the longer intervention resulted in sustained improvements in knowledge, attitudes, and self-reported behavior. Instead of reducing attention and comprehension by youth, the longer scientific based treatment appears to have increased understanding and retention of the material. The findings are instrumental to understanding the design of instruction and communication in affecting compliance during this and future pandemics.

Schooling and Covid-19: lessons from recent research on EdTech

The wide-scale global movement of school education to remote instruction due to Covid-19 is unprecedented. The use of educational technology (EdTech) offers an alternative to in-person learning and reinforces social distancing, but there is limited evidence on whether and how EdTech affects academic outcomes. Recently, we conducted two large-scale randomized experiments, involving ~10,000 primary school students in China and Russia, to evaluate the effectiveness of EdTech as a substitute for traditional schooling. In China, we examined whether EdTech improves academic outcomes relative to paper-and-pencil workbook exercises of identical content. We found that EdTech was a perfect substitute for traditional learning. In Russia, we further explored how much EdTech can substitute for traditional learning. We found that EdTech substitutes only to a limited extent. The findings from these large-scale trials indicate that we need to be careful about using EdTech as a full-scale substitute for the traditional instruction received by schoolchildren.

The effects of male peers on the educational outcomes of female college students in STEM: Experimental evidence from partnerships in Chemistry courses

A major concern among universities around the world is that female students face gender bias, discrimination and related barriers in male-dominated STEM fields. To investigate this concern, we conducted a novel large-scale experiment of interactions between female and male students in one of the most important gateway courses for the Sciences and a course in which students interact one-on-one extensively throughout the term. Over the past four years, at a large public research university, we randomly paired every student enrolled in an introductory Chemistry lab (3,902 students and total N = 5,537). Using precise estimates from the experiment, we provide novel evidence that female students are not negatively affected academically by male partners. When assigned a male partner, female students do not receive lower scores or grades, and they are no more likely to drop the course or not continue in Chemistry or a STEM field. We also find that academically weaker female students are not negatively affected by male students and that female students are not negatively affected when paired with academically stronger male students. Although previous studies have documented that female students self-report experiencing gender bias from male peers in STEM, importantly, we do not find evidence that female students are negatively affected by male peers in intensive, long-term pairwise interactions in their course grades or future STEM course taking. The findings provide hopeful news for future trends in female representation in STEM fields.

The impact of COVID-19 on small business owners: Evidence from the first three months after widespread social-distancing restrictions

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.

Last hired, first fired? Black-white unemployment and the business cycle

Studies have tested the claim that blacks are the last hired during periods of economic growth and the first fired in recessions by examining the movement of relative unemployment rates over the business cycle. Any conclusion drawn from this type of analysis must be viewed as tentative because cyclical movements in the underlying transitions into and out of unemployment are not examined. Using Current Population Survey data matched across adjacent months from 1989-2004, this article provides the first detailed examination of labor market transitions for prime-age black and white men to test the last hired, first fired hypothesis. Considerable evidence is presented that blacks are the first fired as the business cycle weakens. However no evidence is found that blacks are the last hired. Instead, blacks appear to be initially hired from the ranks of the unemployed early in the business cycle and later are drawn from nonparticipation. The narrowing of the racial unemployment gap near the peak of the business cycle is driven by a reduction in the rate of job loss for blacks rather than increases in hiring.

A numerical study of spatial structure during oscillatory combustion in closed vessels in microgravity

The existence and spatial development of gas-phase, thermokinetic oscillations under the influence of mass and thermal diffusion have been investigated by numerical methods in a 1-dimensional system. The conditions correspond to those that would be experienced under microgravity. The interest arises because there have been recent experimental investigations of oscillatory reactions, involving cool flames during butane oxidation, as part of the NASA, KC135 microgravity flight programme. The Sal'nikov, thermokinetic scheme, which is a two-variable model representing an intermediate chemical species and reactant temperature (taking the form P-->A-->B), forms the basis of the present work. In this model, thermal feedback occurs through the exothermicity of the second step and the non-linearity is derived from its temperature dependence. There are no known chemical examples that satisfy Sal'nikov's formal structure but Griffiths and co-workers conceived an experimental analogue under terrestrial conditions whereby a gaseous reactant was allowed to flow from an external reservoir into a closed, heated reactor at a controlled rate via a capillary tube which fed the reactant to the centre of the vessel. The exothermic reaction that occurred in the vessel satisfied the necessary conditions for the second step and the inflow, with no temperature dependence, represented a physical analogue to the first step of the Sal'nikov scheme. Thermokinetic oscillations were observed and the range of conditions for their existences was investigated. One of the experimental systems was the exothermic reaction between hydrogen and chlorine. To represent the Sal'nikov conditions hydrogen was fed slowly into the reactor, which already contained chlorine. We have exploited this chemical system and its experimental implementation in the present paper to investigate the behaviour when no convection or bulk gas motion occurs and when heat and mass transport is driven solely by diffusion. We study the response of alternative numerical approaches to the way in which the first step of the scheme is simulated. In the first, the precursor (P) is supplied at the same rate simultaneously throughout the cells representing the reactor. This is close to the concept of the Sal'nikov model. In the second method, a fixed rate of supply is applied at the inner boundary of the axisymmetric, 1-dimensional system. This is analogous to the experimental procedure. The numerical results show how oscillatory states can be sustained as a result of heat and mass transport by diffusion. The temporal and spatial evolution of reaction in a range of circumstances is discussed.