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Financial Literacy and Remittance Behavior of Skilled and Unskilled Immigrant Groups in Australia

  • Wasana Karunarathne
  • John Gibson

The growing literature on financial literacy suggests people in many countries are poorly prepared for making major financial decisions. One important sub-population rarely examined by financial literacy studies is immigrants, who have specialized financial needs related to remittances. This paper examines variation in financial literacy amongst two actively remitting immigrant groups in Australia – Sri Lankans and Samoans – using surveys designed and supervised by the authors. Paying attention to remittance-related and credit-related literacy, large gaps in the level of financial literacy of the two groups are shown, which are due especially to differences in educational attainment. The wide variation in the transactions costs of various remittance channels available to these two groups suggest that many immigrants could save several hundred dollars per year if improved financial literacy helped to produce more efficient remittance choices.

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File URL: http://fbe.unimelb.edu.au/__data/assets/pdf_file/0010/796969/1170.pdf
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Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 1170.

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Length: 26 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:mlb:wpaper:1170
Contact details of provider: Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia
Phone: +61 3 8344 5355
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Web page: http://www.economics.unimelb.edu.auEmail:


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  1. Anna Paulson & Sherrie Rhine, 2008. "The Financial Assimilation of an Immigrant Group: Evidence on the Use of Checking and Savings Accounts and Currency Exchanges," Journal of Family and Economic Issues, Springer, vol. 29(2), pages 264-278, June.
  2. John Gibson & David McKenzie & Bilal Zia, 2012. "The Impact of Financial Literacy Training for Migrants," CReAM Discussion Paper Series 1216, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Annamaria Lusardi & Olivia S. Mitchell, 2005. "Financial Literacy and Planning: Implications for Retirement Wellbeing," CeRP Working Papers 46, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  4. Carpena, Fenella & Cole, Shawn & Shapiro, Jeremy & Zia, Bilal, 2011. "Unpacking the causal chain of financial literacy," Policy Research Working Paper Series 5798, The World Bank.
  5. John Gibson & David McKenzie & Halahingano Rohorua, 2006. "How Cost Elastic are Remittances? Estimates from Tongan Migrants in New Zealand," Working Papers in Economics 06/02, University of Waikato, Department of Economics.
  6. Mathia Sinning & Markus Hahn & Thomas K. Bauer, 2008. "The Blinder–Oaxaca decomposition for nonlinear regression models," Stata Journal, StataCorp LP, vol. 8(4), pages 480-492, December.
  7. Diana J. Beal & Sarath B. Delpachitra, 2003. "Financial Literacy Among Australian University Students," Economic Papers, The Economic Society of Australia, vol. 22(1), pages 65-78, 03.
  8. McKenzie, David J. & Mistiaen, Johan, 2007. "Surveying migrant households : a comparison of census-based, snowball, and intercept point surveys," Policy Research Working Paper Series 4419, The World Bank.
  9. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
  10. Wasana Karunarathne & John Gibson, 2013. "Financial Literacy and Remittance Behavior of Skilled and Unskilled Immigrant Groups in Australia," Department of Economics - Working Papers Series 1170, The University of Melbourne.
  11. John Gibson & Geua Boe-Gibson & Halahingano Rohorua & David McKenzie, 2007. "Efficient remittance services for development in the Pacific," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 14(2), pages 55-74, December.
  12. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
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