RDP 2020-07: How Many Jobs Did JobKeeper Keep? Appendix A: Comparison of PPP and JobKeeper Programs

Table A1: Comparison of PPP and JobKeeper Programs
  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)
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)

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
(b) Autor et al's preferred central tendency estimate

Sources: Authors’ calculations; Autor et al (2020)