Socioeconomic Assimilation and Wealth Accumulation of Migrants in Australia

24 Pages Posted: 3 Nov 2012

See all articles by Matias Vaira-Lucero

Matias Vaira-Lucero

Macquarie University - Faculty of Business and Economics

Daehoon Nahm

Macquarie University - Department of Economics; Macquarie University, Macquarie Business School

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy; IZA Institute of Labor Economics

Abstract

This paper investigates to what extent the wealth accumulation of immigrants is explained by their degree of assimilation, defined as the immigrants' capacity to become more similar over time to the local people in terms of their norms, values, behaviours, and socioeconomic characteristics. The existing practice to measure assimilation is the use of a time-dimensioned variable like years since migration, which reflects the individual's adaptation to the host country through the implied acquisition of relevant skills and experience. We complement this approach by defining assimilation on the basis of migrants' subjective assessments of integration within the community. To do so, we exploit the rich information collected by the Household Income and Labour Dynamics in Australia Survey (HILDA). In particular, we explore the possible relationship between migrants' savings and assimilation estimating several models, from a pooled OLS to panel data models such as random effect and population average. We find that assimilation has a significant positive effect on wealth accumulation, but in different degrees depending on migrants origins and the type of assets. Understanding migrants' wealth and their perceived degree of assimilation is relevant to understand the supply of domestic savings and their variability. It also carries policy implications on what could be done to affect migrants' sense of assimilation and connected economic behaviour.

Keywords: precautionary savings, net worth, uncertainty, migrants' assimilation

JEL Classification: D31

Suggested Citation

Vaira-Lucero, Matias and Nahm, Daehoon and Tani, Massimiliano, Socioeconomic Assimilation and Wealth Accumulation of Migrants in Australia. IZA Discussion Paper No. 6969, Available at SSRN: https://ssrn.com/abstract=2170657

Matias Vaira-Lucero (Contact Author)

Macquarie University - Faculty of Business and Economics ( email )

NSW 2109
Australia
+61 (0)2 9850 6474 (Phone)

Daehoon Nahm

Macquarie University - Department of Economics ( email )

Sydney NSW 2109
Australia

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Massimiliano Tani

University of New South Wales - Australian Defence Force Academy ( email )

Sydney, NSW 2052
Australia
+612 6268 8512 (Phone)
+612 6248 8450 (Fax)

HOME PAGE: http://www.unsw.adfa.edu.au/sbus/staff_cvs/about_max_t.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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