Discrimination Experience, Financial Access, and Material Hardship: Evidence from Survey of Korean Immigrants in Alabama

Background and Purpose. A sudden surge of Anti-Asian sentiment and hate crimes during the COVID-19 pandemic has shed light on discrimination against Asian Americans, a social problem hidden by the model minority myth. Lack of existing knowledge, however, prohibits policy development. This study examines whether and how racial/ethnic discrimination experience influences financial access and material hardship among Korean immigrants in Alabama where the Korean population is growing but ethnic community resources are scarce.

Methods. This study uses survey data collected from a convenience sample of self-identified Koreans living in two counties in Alabama (N = 241). Key variables are racial/ethnic discrimination experience, two subjective measures of financial access (the levels of feeling comfortable with (1) obtaining basic banking services and (2) applying for credit), and four indicators of material hardship (overall, food-related, health insurance, and medical care). We run logit regressions for dichotomous dependent variables (no health insurance and medical care difficulty), ordered logit regressions for ordinal variables (access to basic banking services, overall hardship, and food hardship), and Ordinary Least Squares (OLS) regression for a continuous variable (access to credit). This study controls for demographic, human capital, immigration-related, economic condition, and access to information variables in regressions.

Results. Descriptive analyses show a high rate of racial/ethnic discrimination experience (64%) among respondents. While respondents report relatively high income and educational attainment, they have limited access to basic banking services and credit: 29% reported feeling uncomfortable using basic banking services, and about half feeling uncomfortable applying for credit. The percentages reporting economic hardship are substantial (20% experienced some levels of difficulties in meeting basic needs, 8% with food-related hardship and without health insurance, and 7% with medical care difficulties). Regression analyses of financial access indicate that discrimination experience has a statistically significant association with access to credit but not with access to basic financial services. Regression results demonstrate that access to credit has a significantly negative association with all four types of material hardship while discrimination experience and access to basic financial services have significant relationships with none of the material hardship measures.

Conclusions and Implications. This study’s findings challenge the model minority myth. In contrast to the model minority myth’s argument that Asian Americans are fully integrated into the US society, almost two in three Korean respondents experienced racial/ethnic discrimination, substantial proportions had limited access to financial services and credit, and a sizeable minority suffered from material hardship. This study also suggests that discrimination experience discourages Korean immigrants from applying for credit, which, in turn, increases their risk of experiencing material hardship. Findings call for active social policies that protect Asian/Korean immigrants from racial/ethnic discrimination. Innovative social policies and programs are also needed to expand Asian/Korean immigrants’ financial access to prevent material hardship among this vulnerable population.