Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114139
Authors: 
Brown, J. David
Earle, John S.
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9267
Abstract: 
We analyze linked databases on all Small Business Administration (SBA) loans, on all SBA lenders, and on all U.S. employers to estimate the effects of financial access on employment growth. Our methods combine regressions with matching on firm age, size, industry, year, and employment history, and with instrumental variables capturing ease of access to SBA lenders. The estimation results imply an increase of 3-4 jobs for each million dollars of loans, suggesting that credit constraints impede small business growth prior to loan receipt. We also investigate the variation in estimated employment effects for the SBA 504 versus 7(a) programs, and with respect to the business cycle, local credit conditions, and within-county versus non-SBA county-industry control firms. Finally, for loans issued over the 1992-2007 period, we estimate total job creation of 1.0-2.1 million and the government's cost per job of $8,200-$18,000 measured five years after the loan year.
Subjects: 
finance
financial access
loans
employment
growth
small business administration
small business finance
JEL: 
D04
G21
G28
H32
H81
J23
L53
Document Type: 
Working Paper

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