Exposure to Islamophobia: The impacts of an increased risk of bullying victimization on human capital

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.