Abstract
This research compares the determinants of retirement savings asset ownership between the native-born and immigrants. Analysis of Survey of Income and Program Participation data indicate there do not appear to be differences in the likelihood of ownership between European or Asian immigrants and the native-born, but there are differences between Latin American immigrants and the native-born in retirement savings asset utilization. Distributional effects related to ethnic identity, income, and education appear to compound these differences. While factors indicating greater acculturation increase the likelihood of ownership for all immigrant groups, there are substantial differences in the way these variables affect ownership. General savings asset ownership is more affected by immigration, while retirement savings is more sensitive to acculturation and ethnic identity.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Assumptions about the distribution of assets within the household may not hold for families from varying cultural backgrounds (Osili and Paulson 2006). Analyses using only the family head were conducted, with comparable results to those presented here.
The SIPP data for date of migration are by year of arrival, in 20 categories. These were reduced to six based on statistical similarity in the model.
Other immigrant groups are identified in the SIPP data, but sample sizes were too small for reliable analyses and were therefore not used in this analysis resulting in a less than 1% reduction in the number of observations.
Individual weights (SIPP variable WPFINWGT) are used to calculate descriptive statistics.
References
Amuedo-Dorantes, C. (2002). Precautionary saving by young immigrants and young natives. Southern Economic Journal, 69(1), 48–71.
Attanasio, O. P. (1993). Cohort analysis of saving behavior by U.S. households. National Bureau of Economic Research, Inc, NBER Working Papers: 4454.
Avery, R. B., & Kennickell, A. B. (1991). Household saving in the US. Review of Income and Wealth, 37(4), 409–432.
Beverly, S. G., McBride, A. M., & Schreiner, M. (2003). A framework of asset-accumulation stages and strategies. Journal of Family and Economic Issues, 24(2), 143–156.
Bosworth, B., Burtless, G., & Sabelhaus, J. (1991). The decline in saving: Evidence from household surveys. Brookings Papers on Economic Activity, 1, 183–241.
Carroll, C. D., Rhee, B., & Rhee, C. (1999). Does cultural origin affect saving behavior? Evidence from immigrants. Economic Development and Cultural Change, 48(1), 33–50.
Cobb-Clark, D. A., & Hildebrand, V. A. (2006a). The wealth and asset holding of U.S.-born and foreign-born households: Evidence from SIPP data. Review of Income and Wealth, 52(1), 17–42.
Cobb-Clark, D. A., & Hildebrand, V. A. (2006b). The wealth of Mexican Americans. The Journal of Human Resources, 41(4), 841–868.
Dustmann, C. (1997). Return migration, uncertainty and precautionary saving. Journal of Development Economics, 52, 295–316.
Fontes, A., & Gutter, M. S. (2006). Differences in the onset of formal retirement savings between native and foreign born individuals: An event history analysis. Consumer Interests Annual, 52, 271–280.
Galor, O., & Stark, O. (1990). Migrant’s savings, the probability of return migrant’s and migrants’ performance. International Economic Review, 31, 463–467.
Gittleman, M., & Wolff, E. N. (2004). Racial differences in patterns of wealth accumulation. The Journal of Human Resources, 39(1), 193–227.
Grinstein-Weiss, M., Yeo, Y., Despard, M., Casalotti, A., & Zhan, M. (2010). Does prior banking experience matter? Differences of the banked and unbanked in Individual Development Accounts. Journal of Family and Economic Issues, 31(2), 212–227.
Gutter, M. S., & Fontes, A. (2006). Racial differences in risky assets ownership: A two-stage model of the investment-making decision process. Financial Counseling and Planning, 17(2), 64–78.
Hao, L. (2004). Wealth of immigrant and native-born Americans. International Migration Review, 38(2), 518–546.
Jun, S., Ball, D. A., & Gentry, J. W. (1993). Modes of consumer acculturation. Association for Consumer Research Journal, 27(1), 91–117.
Keefe, S. E. (1980). Acculturation and the extended family among urban Mexican Americans. In A. M. Padilla (Ed.), Acculturation theory, models and some new findings (pp. 85–110). Boulder, CO: Westview Press.
Lee, W. (1988). Becoming an American consumer: A cross-cultural study of consumer acculturation among Taiwanese, Taiwanese in the United States and Americans. Doctoral Dissertation, University of Illinois, Urbana-Champaign.
Ogden, D. T., Ogden, J. R., & Schau, H. J. (2004). Exploring the impact of culture and acculturation on consumer purchase decisions: Toward a microcultural perspective. Academy of Marketing Science Review, 3, 1–22.
Osili, U. O., & Paulson, A. L. (2006). Immigrant-native difference in financial market participation. Federal Reserve Bank of Chicago Working Paper WP 2004-18.
Osili, U. O., & Paulson, A. L. (2008). Institutions and financial development: Evidence from international migrants in the United States. The Review of Economics and Statistics, 90(3), 498–517.
Passel, J. S., & Cohn, D. (2008). U.S. population projections: 2005–2050. Pew Hispanic Center Report. Retrieved April 11, 2011 from http://www.pewresearch.org.
Paulson, A., & Rhine, S. L. W. (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, 29, 264–278.
Redfield, R., Linton, R., & Herskovits, M. J. (1936). Memorandum for the study of acculturation. American Anthropologist, 38(1), 149–152.
Rhine, S. L. W., & Greene, W. H. (2006). The determinants of being unbanked for U.S. immigrants. The Journal of Consumer Affairs, 40(1), 21–40.
Shamsudden, A. F., & DeVoretz, D. J. (1998). Wealth accumulation of Canadian and foreign born households in Canada. Review of Income and Wealth, 44(4), 515–533.
Sharpe, D. (2008). Economic status of older Asians in the United States. Journal of Family and Economic Issues, 28(4), 570–583.
Sharpe, D. L., & Abdel-Ghany, M. (2006). Determinants of income differentials: Comparing Asians with Whites and Blacks. Journal of Family and Economic Issues, 27, 588–600.
Spencer, H. L., & Fan, J. X. (2002). Savers, debtors, and simultaneous debtors and savers. Financial Planning and Counseling, 13(2), 25–38.
U.S. Census Bureau. (2004). Demographics Survey Division, Survey of Income and Program Participation. Retrieved April 11, 2011 from http://vvvvvv.b1s.census.gov/sipp/.
Yao, R., Gutter, M. S., & Hanna, S. D. (2005). The financial risk tolerance of Blacks, Hispanics, and Whites. Financial Counseling and Planning, 16(1), 51–62.
Yuh, Y., & Hanna, S. D. (2010). Which household think they save? The Journal of Consumer Affairs, 44(1), 70–97.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Fontes, A. Differences in the Likelihood of Ownership of Retirement Saving Assets by the Foreign and Native-Born. J Fam Econ Iss 32, 612–624 (2011). https://doi.org/10.1007/s10834-011-9262-3
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10834-011-9262-3