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A road to assimilation: immigrants and financial markets

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  • Swarnankur Chatterjee
  • Velma Zahirovic-Herbert

Abstract

This paper compares the financial market participation of immigrants and native-born Americans. Financial asset ownership is examined after controlling for the immigrants’ country of origin using a nationally representative National Longitudinal Survey (NLSY79) data set. The determinants of preference for financial asset ownership and the amount of financial equity held by households are estimated using a two-stage procedure. The results indicate that immigrants are less likely to own financial assets and more likely to have lower financial equity than native-born residents. Income uncertainty and risk tolerance of immigrants are associated with their preference for financial investments. Immigrants’ years of residence in the United States also increase their financial asset ownership. A discussion of the implications of these findings for policy makers, immigration researchers, and scholars of household savings behavior is also included. Copyright Springer Science+Business Media, LLC 2014

Suggested Citation

  • Swarnankur Chatterjee & Velma Zahirovic-Herbert, 2014. "A road to assimilation: immigrants and financial markets," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 38(2), pages 345-358, April.
    • Handle: RePEc:spr:jecfin:v:38:y:2014:i:2:p:345-358
    DOI: 10.1007/s12197-011-9224-5
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    Cited by:

    1. Graziella Bertocchi & Marianna Brunetti & Anzelika Zaiceva, 2023. "The Financial Decisions of Immigrant and Native Households: Evidence from Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(1), pages 117-174, March.
    2. Anoosheh Rostamkalaei & Allan Riding, 2020. "Immigrants, Financial Knowledge, and Financial Behavior," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 951-977, September.
    3. Saasa, Sherinah & Ward, Kaitlin P. & Sandberg, Spencer & Jacobson, Justin, 2021. "Financial hardship, neighborhood cohesion and child externalizing behaviors: An extension of the family stress model among immigrant mothers," Children and Youth Services Review, Elsevier, vol. 128(C).
    4. Durba Chakrabarty & Michael J. Osei & John V. Winters & Danyang Zhao, 2019. "Which immigrant and minority homeownership rates are gaining ground in the US?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 43(2), pages 273-297, April.
    5. Mitra Naseh & Jihye Lee & Yingying Zeng & Proscovia Nabunya & Valencia Alvarez & Meena Safi, 2024. "Understanding Economic Integration in Immigrant and Refugee Populations: A Scoping Review of Concepts and Metrics in the United States," Economies, MDPI, vol. 12(7), pages 1-14, June.
    6. Luik, Marc-André & Steinhardt, Max Friedrich, 2016. "Immigrant-native differences in stockholding – The role of cognitive and non-cognitive skills," Journal of Empirical Finance, Elsevier, vol. 38(PA), pages 103-119.
    7. Nonna Kushnirovich, 2016. "Immigrant investors in financial markets: modes of financial behavior," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 17(6), pages 992-1006, November.
    8. Graziella Bertocchi & Marianna Brunetti & Anzelika Zaiceva, 2018. "The Financial Decisions of Immigrant and Native Households: Evidence from Italy," Department of Economics 0138, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

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    More about this item

    Keywords

    Financial Assets; Stocks; Risk Tolerance; Income Uncertainty; Portfolio Choice; Immigration; D03; D1; J61;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D1 - Microeconomics - - Household Behavior
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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