Do Immigrants Have Lower Participation Rates in U.S. Financial Markets?
The International Journal of Business and Finance Research, Vol. 3, No. 2, pp. 1-13, 2009
13 Pages Posted: 5 Jul 2010 Last revised: 30 Jun 2011
Date Written: 2009
This paper uses data from the National Longitudinal Survey to examine the differences in individual financial market participation among native-born and immigrant Americans. The results indicate that when compared with natives, immigrants are less likely to own financial assets. A decomposition analysis of financial asset ownership reveals that income gap along with differences in educational attainment as well as the wealth and risk tolerance are the biggest contributors to this disparity. Additionally, income, wealth, inheritance, and educational attainment are positive predictors of financial market participation. Age, income, net worth and number of years of stay in the United States are positively associated with increase in financial wealth of immigrants across time.
Keywords: Immigrants, Household finance, Investor behavior, Stock market participation
JEL Classification: D14, G11, N30
Suggested Citation: Suggested Citation