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Pro-immigrant legislation and financial inclusion: The effects of sanctuary policies on the mortgage market

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  • Zuchowski, David

Abstract

Does pro-immigrant legislation improve financial inclusion? This paper examines how granting safe havens for immigrants impacts Hispanics' financial behavior and discrimination against them in the U.S. mortgage market. To identify the effect, I take advantage of the staggered implementation of sanctuary policies across counties between 2010 and 2021. Using an event study approach, I find that sanctuary policies increase the demand for mortgages among Hispanics. I also find evidence of a decrease in the rejection rates of mortgage loans requested by Hispanics in counties that implemented sanctuary policies. Politically volatile and Republican-leaning states are the main drivers of the reduction in this potential discriminatory behavior. Taken together, the findings underscore the importance of inclusive public policies in promoting financial inclusion of immigrants.

Suggested Citation

  • Zuchowski, David, 2023. "Pro-immigrant legislation and financial inclusion: The effects of sanctuary policies on the mortgage market," Ruhr Economic Papers 1053, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:280425
    DOI: 10.4419/96973222
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    References listed on IDEAS

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    More about this item

    Keywords

    Sanctuary policies; immigration policy; mortgages; financial inclusion;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • K37 - Law and Economics - - Other Substantive Areas of Law - - - Immigration Law
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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