The Relationship Between Business Loans and Crime: Evidence From the COVID-19 Pandemic

• In Event: Macrosocial Factors and Crime

Abstract

During the COVID-19 pandemic in early April 2020 through March 2021, the Paycheck Protection Program (PPP) loans provided relief to small businesses through low-interest loans intended to retain employees and keep the businesses open. Literature related to PPP loans has focused on if the PPP loans protected employment at eligible businesses and PPP loan fraud. Prior research has also demonstrated the importance of employment and neighborhood disinvestment in crime prevention. The present study examines PPP loan’s relationship to county crime through the mediator of employment rates in the context of Colorado during the PPP loan rollout (2020-2021). The study measures include PPP loans as reported jobs and total loan dollars, crime, employment data, census control variables, and COVID-19 rates. The present study seeks to extend the literature on business policy’s relationship to crime and the role of employment in crime.

Author

• Christianna Palermo, Northeastern University