A Comparison of Financial Behaviors Among Immigrant and U.S.-Born Utilizing the Nesarc III Dataset

Background

Recent research suggests that an immigrant paradox exists, where despite immigrants severe economic and social disadvantage, they are healthier than native-born in the host country, and participate in less problem behavior than native-born including crime and violence. However, little is known about whether the immigrant paradox holds for financial-related behaviors. Thus, the goal of the present investigation is to take advantage of a large-scale data source to examine financial responsibility among immigrants compared to U.S.-born individuals. It is hypothesized that immigrants will be more likely to demonstrate financially responsible behaviors, compared to native-born individuals.

Methods

Study findings are based on data from the National Epidemiologic Survey on Alcohol and Related Conditions III (NESARC-III). The NESARC-III is a large population based cross-sectional survey, that samples n=36,309 non-institutionalized U.S. residents aged 18 years and older. The dataset included n=29,896 U.S.-born respondents and n=6,404 immigrant respondents. Respondents were asked questions that measured financially responsible behaviors, and were categorized as engaging in impulsive spending, having debt, and financial planning. Immigrant respondents were also asked the length of time in years that they have resided in the United States. Principle Component Analysis was utilized as a technique of dimension reduction, and logistic regression was used to examine the association between nativity and financially responsible behaviors, producing odds ratios (OR), while controlling for age, gender, race/ethnicity, household income, marital status, urbanicity, and region. All analyses were conducted using STATA 14.

Results

Results indicate that immigrants are significantly more likely to be financially responsible compared to native-born, despite lower levels of income, less education, and residing in urban areas. Immigrants were found to be 38% less likely to engage in impulsive spending behavior compared to U.S. born (OR=0.62, p<0.05). When compared to U.S-born, immigrants were found to be 25% less likely to report engaging in debt related behavior (OR=0.75, p<0.001). Immigrants were found to be 21% more likely to report engaging in financial planning behavior, when compared to U.S.-born respondents (OR=1.21, p<0.001). Lastly, each additional year an immigrant lived in the U.S. was found to increase the probability of engaging in impulsive spending by 4% (p<0.05) and debt behavior by 2% (p<0.001).

Conclusions

This study adds to the literature on the immigrant paradox and extends into financial behavior. These findings on financially responsible behaviors among immigrants help to dissolve the general public perception of the negative impact that immigrants have here in the United States. These findings portray immigrants in a positive light, and suggest that they are engaging in pro-social behaviors in the community. Research on this topic is especially relevant to social work practice and policy today. Due to the increasing rate of immigration in the United States, a better understanding of immigrants’ behavior and tendencies regarding financial decisions need to be assessed, in order to serve this vulnerable population effectively.