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The Wealth Position of Immigrant Families in Canada

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  • Zhang, Xuelin
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    Abstract

    The economic assimilation of immigrants is a key concern for economists and policy makers. The topic has been widely explored in terms of earnings assimilation of immigrants. Using the 1999 Survey of Financial Security, this study attempts to look at the issue from the wealth perspective. Among married families, immigrants have higher wealth than their native-born counterparts from the 40th to 90th percentiles of the distribution, with the wealth gap ranging between $20,000 and $78,000. Among single families, immigrants have higher wealth from the 55th to 95th percentiles, with the wealth gap ranging between $14,000 and $145,000. At the bottom of the distribution, however, evidence suggests that immigrants have lower wealth, although the gap is generally below $10,000. Various decomposition results indicate that the age of the major income recipient (and of the spouse for married families) as well as factors affecting permanent income explain a significant portion of the wealth gap in cases where immigrant families have higher wealth than the native-born. At the bottom of the wealth distribution, however, the wealth gap cannot be explained by the age of the major income recipient, permanent income factors, or family size (or lone-parent status), suggesting that low-wealth immigrant families may behave differently than low-wealth Canadian-born families in their wealth accumulation process. The wealth gap is also studied from a cohort perspective. Not surprisingly, recent immigrants have lower wealth than comparable Canadian-born families, and immigrants who arrived before 1976 have higher wealth. While immigrants who arrived in Canada between 1976 and 1985 are widely believed to initially have had more of an earnings disadvantage than their predecessors with respect to the Canadian-born, this study finds that, over the upper segment of the distribution, the wealth of this cohort is not significantly different from that of comparable Canadian-born families. But over the lower portion of the distribution, the cohort has lower wealth.

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    Bibliographic Info

    Paper provided by Statistics Canada, Analytical Studies Branch in its series Analytical Studies Branch Research Paper Series with number 2003197e.

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    Date of creation: 18 Nov 2003
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    Handle: RePEc:stc:stcp3e:2003197e

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    Keywords: Ethnic diversity and immigration; Household assets; debts and wealth; Household; family and personal income; Immigrants and non-permanent residents; Income; pensions; spending and wealth; Integration of newcomers; Labour market and income;

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    Cited by:
    1. Thomas Y. Mathä & Alessandro Porpiglia & Eva Sierminska, 2011. "The Immigrant/Native Wealth Gap in Germany, Italy and Luxembourg," BCL working papers 57, Central Bank of Luxembourg.
    2. John Gibson & Trinh Le & Steven Stillman, 2007. "What explains the wealth gap between immigrants and the New Zealand born?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(2), pages 131-162.
    3. Cobb-Clark, Deborah A. & Hildebrand, Vincent A., 2008. "The Asset Portfolios of Native-Born and Foreign-Born Households," IZA Discussion Papers 3304, Institute for the Study of Labor (IZA).

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