Impact of 'Eat Out to Help Out' on firm creation

Abstract

We investigate the effect of the UK’s “Eat Out to Help Out" policy on firm creation. The policy subsidised people to eat-out at participating restaurants for a period over the COVID-19 pandemic. We compare the number of new incorporations in postcodes with participating restaurants against all postcodes. We find a 6.3% increase in business incorporations in areas with participating restaurants due to the policy. The increase is largest in high-street service activities such as ‘hairdressing and other beauty treatment’. We interpret this as evidence of a demand stimulus in one sector, leading to anticipated demand increases in geographically-close sectors, and consequently a supply increase as measured by firm creation.

Yannis Galanakis

Postdoctoral Research Associate

Yannis' research interests include Labour and Applied Economics.