This paper examines the effects of 9/11 on the self-employment outcomes of Arab and Muslim immigrants. Using CPS Data 2000–2005 and a difference-in-differences approach, I analyze the changes in their self-employment entry/exit decisions and earnings after 9/11 using native whites as the main comparison group. I find that the Arab and Muslim immigrants are less likely to enter self-employment after 9/11, especially into industries that require higher levels of capital investment. However, there is no evidence that 9/11 has negative impacts on their exit decisions or earnings. The paper further documents a shift of Arab and Muslim immigrants’ businesses toward industries such as construction, finance/real estate/insurance services, and professional services after 9/11, areas in which they have performed well.
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