IDEAS home Printed from https://ideas.repec.org/a/spr/izalpo/v4y2015i1p1-2710.1186-s40173-015-0033-x.html
   My bibliography  Save this article

The impact of the recession on the wealth of older immigrant and native households in the United States

Author

Listed:
  • Catalina Amuedo-Dorantes
  • Susan Pozo

Abstract

Using the 2006 and 2010 Health and Retirement Study, we explore how the recent recession impacted the wealth holding and retirement plans of older households in the United States. Of particular interest to us is whether the impact on household asset ownership, asset wealth and household retirement behavior varied with the nativity of the household and its standing in the wealth distribution prior to the onset of the recession. We find that the so-called Great Recession made a significant dent on the portfolios of older American households by eroding the value of specific assets to the point of delaying their planned retirement. Furthermore, its impacts were unevenly distributed across demographic and economic groups, with mixed and immigrant households in the middle and top wealth quartiles prior to the recession enduring significantly larger wealth losses than natives due, primarily, to their greater losses in primary housing ownership and primary housing values. JEL codes: D31; J26 Copyright Amuedo-Dorantes and Pozo; licensee Springer. 2015

Suggested Citation

  • Catalina Amuedo-Dorantes & Susan Pozo, 2015. "The impact of the recession on the wealth of older immigrant and native households in the United States," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-27, December.
    • Handle: RePEc:spr:izalpo:v:4:y:2015:i:1:p:1-27:10.1186/s40173-015-0033-x
    DOI: 10.1186/s40173-015-0033-x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1186/s40173-015-0033-x
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1186/s40173-015-0033-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Libertad Gonzalez & Francesc Ortega, 2013. "Immigration And Housing Booms: Evidence From Spain," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 37-59, February.
    2. Saiz, Albert, 2007. "Immigration and housing rents in American cities," Journal of Urban Economics, Elsevier, vol. 61(2), pages 345-371, March.
    3. Gopi Shah Goda & John B. Shoven & Sita Nataraj Slavov, 2011. "What Explains Changes in Retirement Plans during the Great Recession?," American Economic Review, American Economic Association, vol. 101(3), pages 29-34, May.
    4. Catalina Amuedo-Dorantes & Susan Pozo, 2002. "Precautionary Saving by Young Immigrants and Young Natives," Southern Economic Journal, John Wiley & Sons, vol. 69(1), pages 48-71, July.
    5. Edward N. Wolff, 2012. "The Asset Price Meltdown and the Wealth of the Middle Class," NBER Working Papers 18559, National Bureau of Economic Research, Inc.
    6. George J. Borjas, 2000. "Issues in the Economics of Immigration," NBER Books, National Bureau of Economic Research, Inc, number borj00-1, March.
    7. Carroll, Christopher D & Rhee, Byung-Kun & Rhee, Changyong, 1999. "Does Cultural Origin Affect Saving Behavior? Evidence from Immigrants," Economic Development and Cultural Change, University of Chicago Press, vol. 48(1), pages 33-50, October.
    8. Koenker, Roger, 2004. "Quantile regression for longitudinal data," Journal of Multivariate Analysis, Elsevier, vol. 91(1), pages 74-89, October.
    9. Una Okonkwo Osili & Anna L. Paulson, 2006. "What can we learn about financial access from U.S. immigrants?," Working Paper Series WP-06-25, Federal Reserve Bank of Chicago.
    10. Barry P. Bosworth & Gary Burtless, 2010. "Recessions, Wealth Destruction, and the Timing of Retirement," Working Papers, Center for Retirement Research at Boston College wp2010-21, Center for Retirement Research, revised Dec 2010.
    11. Jesse Bricker & Brian K. Bucks & Arthur Kennickell & Traci L. Mach & Kevin Moore, 2011. "Drowning or Weathering the Storm? Changes in Family Finances from 2007 to 2009," NBER Working Papers 16985, National Bureau of Economic Research, Inc.
    12. Eileen McConnell & Ilana Akresh, 2010. "Housing Cost Burden and New Lawful Immigrants in the United States," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 29(2), pages 143-171, April.
    13. Borjas, George J. (ed.), 2000. "Issues in the Economics of Immigration," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226066318, December.
    14. Christopher D. Carroll & Byung-Kun Rhee & Changyong Rhee, 1994. "Are There Cultural Effects on Saving? Some Cross-Sectional Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 685-699.
    15. Deborah A. Cobb‐Clark & Vincent A. Hildebrand, 2009. "The Asset Portfolios of Native‐born and Foreign‐born Australian Households," The Economic Record, The Economic Society of Australia, vol. 85(268), pages 46-59, March.
    16. Mathä, Thomas Y. & Porpiglia, Alessandro & Sierminska, Eva, 2011. "The immigrant/native wealth gap in Germany, Italy and Luxembourg," Working Paper Series 1302, European Central Bank.
    17. Crawford, Rowena, 2013. "The effect of the financial crisis on the retirement plans of older workers in England," Economics Letters, Elsevier, vol. 121(2), pages 156-159.
    18. Purvi Sevak & Lucie Schmidt, 2007. "How do Immigrants Fare in Retirement?," Working Papers wp169, University of Michigan, Michigan Retirement Research Center.
    19. Brooke Helppie McFall, 2011. "Crash and Wait? The Impact of the Great Recession on the Retirement Plans of Older Americans," American Economic Review, American Economic Association, vol. 101(3), pages 40-44, May.
    20. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2010. "What the Stock Market Decline Means for the Financial Security and Retirement Choices of the Near-Retirement Population," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 161-182, Winter.
    21. Beverley Searle, 2011. "Recession and housing wealth," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 3(1), pages 33-48, April.
    22. Barry Bosworth, 2012. "Economic Consequences of the Great Recession: Evidence from the Panel Study of Income Dynamics," Working Papers, Center for Retirement Research at Boston College wp2012-4, Center for Retirement Research, revised Feb 2012.
    23. Dustmann, Christian, 1997. "Return migration, uncertainty and precautionary savings," Journal of Development Economics, Elsevier, vol. 52(2), pages 295-316, April.
    24. Courtney C. Coile & Phillip B. Levine, 2011. "Recessions, Retirement, and Social Security," American Economic Review, American Economic Association, vol. 101(3), pages 23-28, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Graziella Bertocchi & Marianna Brunetti & Anzelika Zaiceva, 2023. "The Financial Decisions of Immigrant and Native Households: Evidence from Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(1), pages 117-174, March.
    2. Amuedo-Dorantes Catalina & Borra Cristina, 2017. "Retirement Decisions in Recessionary Times: Evidence from Spain," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(2), pages 1-21, April.
    3. Catalina Amuedo-Dorantes & Cristina Borra, 2018. "Emerging wealth disparities after the storm: Evidence from Spain," Review of Economics of the Household, Springer, vol. 16(4), pages 1119-1149, December.
    4. Ricci, Chiara Assunta & Scicchitano, Sergio, 2021. "The role of Great Recession on income polarization by population groups," GLO Discussion Paper Series 766, Global Labor Organization (GLO).
    5. Chiara Assunta Ricci & Sergio Scicchitano, 2021. "Decomposing changes in income polarization by population group: what happened during the crisis?," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 235-259, April.
    6. Graziella Bertocchi & Marianna Brunetti & Anzelika Zaiceva, 2018. "The Financial Decisions of Immigrant and Native Households: Evidence from Italy," Department of Economics 0138, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Graziella Bertocchi & Marianna Brunetti & Anzelika Zaiceva, 2023. "The Financial Decisions of Immigrant and Native Households: Evidence from Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(1), pages 117-174, March.
    2. Amuedo-Dorantes Catalina & Borra Cristina, 2017. "Retirement Decisions in Recessionary Times: Evidence from Spain," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(2), pages 1-21, April.
    3. Gopi Shah Goda & Emilie Jackson & Lauren Hersch Nicholas & Sarah See Stith, 2023. "The impact of Covid-19 on older workers’ employment and Social Security spillovers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(2), pages 813-846, April.
    4. Thomas Bauer & Mathias Sinning, 2011. "The savings behavior of temporary and permanent migrants in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(2), pages 421-449, April.
    5. Mathias Sinning, 2011. "Determinants of savings and remittances: empirical evidence from immigrants to Germany," Review of Economics of the Household, Springer, vol. 9(1), pages 45-67, March.
    6. Swarnankur Chatterjee & Velma Zahirovic-Herbert, 2011. "Homeownership and Housing Equity: An Examination of Native- Immigrant Differences in Housing Wealth," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 17(2), pages 211-223, May.
    7. Asadul Islam & Steven Stillman & Christopher Worswick, 2018. "Can immigrants insure against shocks as well as the native-born?," Applied Economics, Taylor & Francis Journals, vol. 50(49), pages 5302-5315, October.
    8. Graziella Bertocchi & Marianna Brunetti & Anzelika Zaiceva, 2018. "The Financial Decisions of Immigrant and Native Households: Evidence from Italy," Department of Economics 0138, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    9. 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.
    10. Asadul Islam & Jaai Parasnis & Dietrich Fausten, 2013. "Do Immigrants Save Less than Natives? Immigrant and Native Saving Behaviour in Australia," The Economic Record, The Economic Society of Australia, vol. 89(284), pages 52-71, March.
    11. repec:kap:iaecre:v:17:y:2011:i:2:p:211-223 is not listed on IDEAS
    12. Osili, Una Okonkwo & Paulson, Anna, 2014. "Crises and confidence: Systemic banking crises and depositor behavior," Journal of Financial Economics, Elsevier, vol. 111(3), pages 646-660.
    13. repec:zbw:rwirep:0109 is not listed on IDEAS
    14. repec:zbw:rwirep:0030 is not listed on IDEAS
    15. Mathias Sinning, 2007. "Wealth and Asset Holdings of Immigrants in Germany," Ruhr Economic Papers 0030, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    16. Asad Islam & Jaai Parasnis, 2022. "Heterogeneous effects of health shocks in developed countries: Evidence from Australia," Southern Economic Journal, John Wiley & Sons, vol. 89(2), pages 471-495, October.
    17. Nicolas Sirven & Thomas Barnay, 2017. "Expectations, loss aversion and retirement decisions in the context of the 2009 crisis in Europe," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(1), pages 25-44, April.
    18. David Love & Lucie Schmidt, 2015. "Comprehensive Wealth of Immigrants and Natives," Working Papers wp328, University of Michigan, Michigan Retirement Research Center.
    19. Bauer Thomas & Sinning Mathias, 2009. "The Purpose of Remittances: Evidence from Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(6), pages 730-742, December.
    20. Gustafson, Matthew T., 2017. "The market sensitivity of retirement and defined contribution pensions: Evidence from the public sector," Journal of Public Economics, Elsevier, vol. 145(C), pages 1-13.
    21. Swarnankur Chatterjee & Velma Zahirovic-Herbert, 2014. "A road to assimilation: immigrants and financial markets," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 38(2), pages 345-358, April.
    22. Goda, Gopi Shah & Jackson, Emilie & Nicholas, Lauren Hersch & Stith, Sarah See, 2023. "Older workers’ employment and Social Security spillovers through the second year of the COVID-19 pandemic," Journal of Pension Economics and Finance, Cambridge University Press, vol. 22(4), pages 524-549, October.
    23. Thomas K. Bauer & Mathias G. Sinning, 2009. "The Purpose of Remittances – Evidence from Germany," Ruhr Economic Papers 0109, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

    More about this item

    Keywords

    Great recession; Wealth; Older households; Immigrants; Natives;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:izalpo:v:4:y:2015:i:1:p:1-27:10.1186/s40173-015-0033-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.