Abstract
This article examines the determinants of financial market participation for a particular group of immigrants: Hmong refugees in Minneapolis/St. Paul, Minnesota. Our findings indicate that controlling for income and education, Hmong immigrants are less likely to have savings accounts and credit cards and are more likely to use currency exchanges, compared to randomly selected non-Hmong households living in the same neighborhoods. However, these effects are mitigated by time spent in the US. Financial assimilation appears to take 15–20 years. These findings expand our understanding of immigrant assimilation and highlight some of the complexities associated with the process of assimilation.
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Notes
Recently, some financial institutions have moved away from this requirement, particularly for Mexican immigrants, and are allowing individuals to provide a tax id number in place of a social security number and to verify identification using a card issued by the Mexican Consulate.
The Chiswick study (like ours) uses cross-sectional data, and Borjas (1985) suggests that because of this Chiswick overestimates the pace of assimilation.
SSI is Supplemental Security Income (a Federal income supplement program funded by general tax revenues, not Social Security taxes). SSI is designed to help aged, blind and disabled people who have little or no income; and it provides cash to meet basic needs for food clothing, and shelter. MFIP (Minnesota Family Investment Program) is a welfare-to-work program that seeks to encourage work, reduce welfare dependency and alleviate poverty. MFIP offers enhanced financial incentives to working families and mandates employment and training workshops.
Our understanding of the Hmong immigration experience is based largely on Long (1993).
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Acknowledgments
Helpful comments from John DiNardo, Ron Feldman, Dave Fettig, Robin Newberger, Una Okonkwo Osili, Marina Plavnik, Art Rolnick, Jason Schmidt, Richard Todd, Maude Toussaint-Comeau, Robert Townsend and Alicia Williams are gratefully acknowledged. All remaining errors are of course our own. The views presented in this article are those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of Chicago, the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), or the US Treasury Department.
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Paulson, A., Rhine, S.L.W. The Financial Assimilation of an Immigrant Group: Evidence on the Use of Checking and Savings Accounts and Currency Exchanges. J Fam Econ Iss 29, 264–278 (2008). https://doi.org/10.1007/s10834-008-9097-8
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DOI: https://doi.org/10.1007/s10834-008-9097-8