Abstract: Do Immigrants Lack Financial Knowledge? Evidence from Canada (Society for Social Work and Research 23rd Annual Conference - Ending Gender Based, Family and Community Violence)

Schedule:

Thursday, January 17, 2019: 4:45 PM

Union Square 1 Tower 3, 4th Floor (Hilton San Francisco)

* noted as presenting author

Mohammad Khan, MSW, Doctoral Candidate, Centre for Research on Children and Families, Montreal, QC, Canada

Ilyan Ferrer, MSW, Assistant Professor, Faculty of Social Work, Calgary, AB, Canada

Yeonjung Lee, PhD, Assistant Professor, University of Calgary, Calgary, AB, Canada

David Rothwell, PhD, Assistant Professor, Oregon State University, Corvallis, OR

Background and Purpose

Immigrants play an important role in the economic growth and development of Canadian society. However, there is a disparity in income and assets accumulation between immigrants and their Canadian-born counterparts (Picot, 2004). Identifying the factors that impede economic integration and well-being of immigrants is an important goal for social work research. Financial knowledge is a concept that has been used to explore how individuals’ understanding of everyday finances influences their financial decision-making and use of financial products and services (Hilgert, Hogarth, & Beverly, 2003; Xiao, Chen, & Chen, 2014). However, there is limited systematic research on the financial knowledge of immigrants. The purpose of this study is to understand the levels of financial knowledge of immigrants who were not born in Canada and compare with their Canadian-born counterparts. We then extend our analyses to a sub-sample of immigrants to identify factors that explain the levels of financial knowledge of immigrants.

Method

We used data from the 2009 Canadian Financial Capability Survey (CFCS) (N = 15,519). We used an independent sample t-test to examine how financial knowledge differs between immigrants and their Canadian-born counterparts. We also used multivariate regressions to examine how immigration status predicts financial knowledge controlling for demographic and socioeconomic characteristics such as age, gender, family type, education, employment, income, home ownership, and banking status. Another set of analyses were conducted for a sub-sample of immigrants only (n= 2,583) to identify the difference between recent immigrants who migrated to Canada in or after the year of 2000 and non-recent immigrants.

Results

The results of the t-test suggested a statistically significant difference in financial knowledge between immigrants (M= 7.18, SD=3.78) and Canadian-born counterparts (M= 8.32, SD=3.31); t (15,346) =15.56, p<.001. The bi-variate regression results showed that immigrants had 1.26 points lower levels of financial knowledge than Canadian-born counterparts (β= -1.26, p<.001). While controlling for demographic and socioeconomic variables, immigrants showed 1.14 points lower levels of financial knowledge than Canadian-born counterparts (β= -1.14, p<.001). The t-tests results of the sub-sample of immigrants suggested a statistically significant difference in financial knowledge between recent immigrants (M= 6.47, SD=3.71) and non-recent immigrants (M= 7.37, SD=3.76); t (2541) =4.78, p<.001. The bi-variate regression results showed that recent immigrants had .69 points lower levels of financial knowledge that non-recent immigrants (β = -.69; p < .001). The gap even increased to 1.06 points after controlling for demographic and socioeconomic characteristics of immigrants (β = -1.06; p < .001).

Conclusions and Implications

The findings of this study suggest a significant disparity in financial knowledge between immigrants and their Canadian-born counterparts. Similarly, recent immigrants have significantly lower levels of financial knowledge than non-recent immigrants. Understanding the disparities in financial knowledge will allow social workers to plan programs and advocate for policies that address the financial insecurity and poverty of immigrant communities in Canada.