The Effects of COVID-19 on U.S. Small Businesses: Evidence from Owners, Managers, and Employees

Georgij Alekseev, Safaa Amer, Manasa Gopal*, Theresa Kuchler, J. W. Schneider, Johannes Stroebel, Nils Wernerfelt

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


We analyze a large-scale survey of small business owners, managers, and employees in the United States to understand the effects of the COVID-19 pandemic on those businesses. We explore two waves of the survey that were fielded on Facebook in April 2020 and December 2020. We document five facts about the impact of the pandemic on small businesses. (1) Larger firms, older firms, and male-owned firms were more likely to remain open during the early stages of the pandemic with many of these heterogeneities persisting through the end of 2020. (2) At businesses that remained open, concerns about demand shocks outweighed concerns about supply shocks though the relative importance of supply shocks grew over time. (3) In response to the pandemic, almost a quarter of the firms reduced their prices with price reductions concentrated among businesses facing financial constraints and demand shocks; almost no firms raised prices. (4) Only a quarter of small businesses had access to formal sources of financing at the start of the pandemic, and access to formal financing affected how firms responded to the pandemic. (5) Increased household responsibilities affected the ability of managers and employees to focus on their work, whereas increased business responsibilities impacted their ability to take care of their household members. This effect persisted through December 2020 and was particularly strong for women and parents of school-aged children. We discuss how these facts inform our understanding of the economic effects of the COVID-19 pandemic and how they can help design policy responses to similar shocks.

Original languageEnglish (US)
Pages (from-to)7-24
Number of pages18
JournalManagement Science
Issue number1
StatePublished - Jan 2023


  • COVID-19
  • product pricing
  • small business finance
  • small businesses
  • working from home

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research


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