Did 9/11 affect Hispanic-Americans' self-employment entry and exit decisions?

Purpose – The purpose of this paper is to examine two aspects of the self-employment adjustment of immigrant Purpose – The purpose of this paper is to examine the impact of the tragic events of 9/11 on the self-employment entry/exit decisions of native-born Hispanics. Design/methodology/approach – The paper uses the difference-in-differences approach with native Whites as the control group. The dynamics of entry and exit decisions are examined using data from 1999-2003 CPS-ORG. Findings – The estimates reveal a negative impact of 9/11 on Hispanics' self-employment entry decisions, which is mainly the result of less entry from the wage sector, and it has increased Hispanics' self-employment exit, which is mainly the result of increased exit to the wage sector. Research limitations/implications – The results suggest that native Hispanics may have experienced increased job opportunities in the wake of 9/11 and hence became less likely to be “pushed” into self-employment and more likely to be “pulled” out of self-employment. The improved labor market opportunities stem from government increased sanctions against undocumented immigrants, which reduced the demand for illegal immigrant workers, many of whom are Hispanic immigrants, and that native-born Hispanics are likely to be relatively close substitutes for immigrants Hispanics. A limitation of the research is that the estimates are statistically insignificant, possibly due to the relatively small sample size. Originality/value – Existing studies that examine the impact of 9/11 on the Hispanic's labor market outcomes are all focused on immigrants or wage-employment. The paper complements the literature by examining the impact of 9/11 on native-born Hispanics and in particular their self-employment decisions, and thus provides a more complete picture of the impact of 9/11 on Hispanics.