Examining Immigrants Region of Origin with Respect to Financial Behaviors: Findings from a National Sample

Background: 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 U.S.-born including crime and violence. However, little is known about whether the immigrant paradox holds for financial-related behaviors. The purpose of the present study is to examine the prevalence and predictors of financially responsible behaviors among a large sample of immigrants, and to examine patterns among immigrants from major world regions. It is hypothesized that immigrants from different world regions will have distinct financially responsible behaviors when compared to U.S.-born, and within regions.

Method: This study utilized 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. There were n=6,404 immigrant respondents, which were categorized into the following world regions (Africa, Asia, Europe, and Latin America/Caribbean). Variables within the NESARC-III dataset were categorized to measure financially responsible behaviors, such as engagement in impulsive spending, debt behavior, and financial planning. Due to the large number of variables, Principle Component Analysis was utilized as a technique for dimension reduction. Logistic regression was used to examine the association between U.S.-born and immigrants from their region of origin, with respect to financially responsible behaviors, producing odds ratios (OR). The following sociodemographic variables: age, gender, race/ethnicity, household income, marital status, urbanicity and U.S. region, were controlled for in the analyses. Analyses were conducted using STATA 14.

Results: Results indicated that all immigrant regions of origin were more financially responsible than U.S.-born. For engagement in impulsive spending behavior, compared to U.S.-born, Latin American/Caribbean (OR=0.37, 95% CI=[0.31-0.44], p<0.001), Asian (OR=0.45, 95% CI [0.34-0.58], p<0.001), African (OR=0.45, 95% CI [0.28-0.74], p=0.002), and European (OR=0.72, 95% CI [0.53-0.97], p=0.03) immigrants were substantially less likely to engage in impulsive spending behavior. In terms of debt behavior, European (OR=0.53, 95% CI [0.37-0.74], p<0.001), and Latin American/Caribbean (OR=0.77, 95% CI [0.68-0.88], p<0.001) immigrants were substantially less likely to engage in debt-behavior when compared to U.S.-born. Lastly, for financial planning, African immigrants were 2.2 times (OR=2.19, 95% CI [1.41-3.40], p<0.001), and European immigrants were 1.3 times (OR=1.34, 95% CI [1.02-1.78], p=0.4) more likely than U.S.-born to be involved in financial planning behavior.

Conclusions: This study adds to the literature on the immigrant paradox and extends into the area of financial behavior. The demographic profile of the United States is rapidly changing, in large part due to the influx of immigration, and this needs to be reflected in academic research. Understanding the underlying values and belief systems that inform immigrants decision making skills when it comes to being fiscally responsible is important as they are large contributors to the economy. Research in this area allows immigrant-serving organizations the ability to tailor financial programs that are relevant and specific to immigrant groups from different regions, and for restrictive practices related to immigrants and financial institutions to be re-assessed.