We use the shock caused by terrorist attacks on the US on September 11, 2001, to study the short- and long-term consequences of exposure to Islamophobia in high-school-aged youths. Our estimates show an immediate sharp increase in rates of identity-based bullying against Arab/Muslim youths relative to youths of other ethnic groups during the years 2001-2003. We also find exposure to Islamophobia increased school dropout rates by 4.11% among US-born male youths of Arab-Muslim origin, which is a large effect from a baseline of 4.6% of school dropout rate in the affected population. In the long term, however, we find no significant effect on educational attainment among the affected population. The data suggest Arab-Muslim male youths born in 1989 were 8.34% more likely to resort to GED tests as a means of obtaining high school credentials after the attacks. We find full-time male workers born in 1984 earn 12.8% less than similar workers who were unexposed to Islamophobia. Moreover, full-time male Arab-Muslim workers born between 1983 and 1985 are between 9% and 12.5% more likely to be in the first quintile of the state-of-residence-year-wage distribution than similar workers who were not exposed to Islamophobia.
Keywords: Human capital accumulation; Identity-based-bullying victimization; Islamophobia; Labor market outcomes.
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