How Well-Targeted Are Payroll Tax Cuts as a Response to COVID-19? Evidence from China

Policies to Support Businesses through the COVID-19 Shock: A Firm-Level Perspective

“…Additionally, this paper contributes to the emerging literature by authors including Chetty et al (2020), Granja et al (2020), and Cui et al (2020) that have provided some early evidence on the effectiveness of programs to help firms weather the impacts of the pandemic in the same countries, as well as previous studies such as De Mel et al (2012) and Bruhn (2020) that focused on experimental and quasi-experimental evidence from previous crises in Sri Lanka and Mexico. The rest of the paper is structured as follows. The next section presents the data.…”

“…Evidence on the effectiveness of policies during COVID-19 has so far been mixed. Cui et al (2020) and Chen et al (2020) show that payroll tax mitigation and deferral of social insurance contributions in China bolstered the ability of firms to weather the economic downturn. However, Guerrieri et al (2020) warn that in an economy where supply-side shocks directly influence aggregate demand and output, standard fiscal stimulus may be less effective than usual because the Keynesian multiplier feedback is muted due to the shut-down of some sectors.…”

“…Recently published volumes such as Baldwin and di Mauro (2020) have reviewed the range of emerging policy responses to COVID-19 and provided advice on how policy frameworks should evolve -although most of the focus has been on high-income economies and China. Authors such as Cororaton and Rosen (2020), Granja et al (2020), De Marco (2020), Kozeniauskas et al (2020), and Cui et al (2020) have focused on the reach and targeting of specific programs in China, Italy, Portugal, and the United States.…”

Policies to Support Businesses through the COVID-19 Shock: A Firm Level Perspective

“…(2020) , Granja et al. (2020) , che, and Cui, Hicks, and Norton (2020) that have provided some early evidence on the effectiveness of programs to help firms weather the impacts of the pandemic in the same countries, as well as previous studies such as De Mel, Mckenzie, and Woodruff (2012) and Bruhn (2020) that focused on experimental and quasi-experimental evidence from previous crises in Sri Lanka and Mexico.…”

“…Authors such as Cororaton and Rosen (2020) , Granja et al. (2020) , De Marco (2020) , Kozeniauskas, Moreira, and Santos (2020) , and Cui, Hicks, and Norton (2020) have focused on the reach and targeting of specific programs in China, Italy, Portugal, and the United States. Additionally, this paper contributes to the emerging literature by authors including Chetty et al.…”