Latinos and Banking in the United States: The Effect of Latino Heterogeneity, Country of Origin, and Acculturation On Bank Account Ownership
Methods: Data from the Current Population Survey’s January 2009 survey, along with a supplemental questionnaire on bank use were used. In order to understand differences between countries based on their country of origin, Latin American countries were organized based on their Human Development Index (HDI) scores. Groups were created for the U.S., Mexico, countries with moderate-HDI scores, and countries with low-HDI scores. Univariate, bivariate, and logistic regression analysis were conducted to determine the relationship between owning a bank account, the development level of different Latin American countries, key acculturation variables (U.S. citizenship, and speaking Spanish at home), and relevant control variables.
Results: The overall model was statistically significant (χ2 (20) = 1415.07, p<.001) with citizenship status predicting 77% greater odds of owning a bank account, and speaking only Spanish at home predicting 53% lower odds of owning a bank account. Interestingly, Latinos from moderately developed countries had 85% greater odds of owning a bank account, compared to Latinos born in the U.S. Further analysis documented that people from moderate-HDI countries were different from all other groups in certain control variables.
Implications: Results of the acculturation variables were consistent with the capability approach with regard to the positive effect that acculturation can have on bank use. On its face, the 85% greater odds of owning a bank account for Latinos from moderate-HDI countries would seem to disagree with the capability approach, however it may point to the isolation that some U.S. born Latinos face. The reason for why U.S. Latinos have such poor outcomes is unclear and merits further research. Differences amongst the HDI groups supports the argument put forth by Massey and others, that Latinos are not homogeneous, and that current survey methodology fails to gather sufficient data to explain these differences. Conclusions advocate for increased research, and better sampling methodology, by researches who are interested in outcomes for Latino subgroups. The findings also have implications for financial educators interested in helping increase financial literacy and access for Latinos, with recommendations that encourage culturally competent outreach strategies.