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September 11 and the Rise of Necessity Self-Employment among Mexican Immigrants

Author

Listed:
  • Wang, Chunbei

    (University of Oklahoma)

  • Lofstrom, Magnus

    (Public Policy Institute of California)

Abstract

Since the September 11 attacks (9/11), the U.S. has seen a tightening of immigration policies. Previous studies find that stricter immigration enforcement has the unintended effect of pushing undocumented immigrants into self-employment. This paper builds on the literature to better understand the changes in the types of self-employment among Mexican immigrants triggered by the tightened immigration enforcement after 9/11. Using a difference-in-differences approach, and the recently developed measures by Fairlie and Fossen [2018] to distinguish between necessity and opportunity self-employment, we find that both necessity and opportunity self-employment increased among Mexican immigrants after 9/11. However, the effect is most prominent on necessity self-employment, consistent with the hypothesis that they are pushed into self-employment as a survival alternative.

Suggested Citation

  • Wang, Chunbei & Lofstrom, Magnus, 2019. "September 11 and the Rise of Necessity Self-Employment among Mexican Immigrants," IZA Discussion Papers 12555, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp12555
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    References listed on IDEAS

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    1. Kenneth Couch & Robert Fairlie, 2010. "Last hired, first fired? black-white unemployment and the business cycle," Demography, Springer;Population Association of America (PAA), vol. 47(1), pages 227-247, February.
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    3. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    4. Magnus Lofstrom, 2011. "Low-skilled immigrant entrepreneurship," Review of Economics of the Household, Springer, vol. 9(1), pages 25-44, March.
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    6. Catalina Amuedo-Dorantes & Cynthia Bansak, 2012. "The Labor Market Impact of Mandated Employment Verification Systems," American Economic Review, American Economic Association, vol. 102(3), pages 543-548, May.
    7. Fairlie, Robert W & Fossen, Frank M, 2018. "Opportunity Versus Necessity Entrepreneurship: Two Components of Business Creation," Santa Cruz Department of Economics, Working Paper Series qt0rd0g01g, Department of Economics, UC Santa Cruz.
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    Cited by:

    1. Averett, Susan L. & Bansak, Cynthia & Condon, Grace & Dziadula, Eva, 2023. "The Gendered Impact of In-State Tuition Policies on Undocumented Immigrants' College Enrollment, Graduation, and Employment," IZA Discussion Papers 16698, Institute of Labor Economics (IZA).
    2. Travis Wiseman, 2021. "Immigration and Baumolian Entrepreneurship in the United States," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 36(Fall 2021), pages 1-26.

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    More about this item

    Keywords

    mexican immigrants; self-employment; 9/11; tightened immigration policies; necessity;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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