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Immigrants Have Lower Participation Rates In U.S. Financial Markets?

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  • Swarn Chatterjee

Abstract

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.

Suggested Citation

  • Swarn Chatterjee, 2009. "Immigrants Have Lower Participation Rates In U.S. Financial Markets?," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 3(2), pages 1-13.
    • Handle: RePEc:ibf:ijbfre:v:3:y:2009:i:2:p:1-13
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    More about this item

    Keywords

    Immigrants; Household finance; Investor behavior; Stock market participation;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative

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