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The impact of collectivism on savings behavior: a case study of Mexican-Americans and non-Mexican Latinos


This interdisciplinary study combines anthropological and economic theories and methods to understand how Mexican-Americans’ collectivist cultural values affect their savings behavior and their preparation for retirement. Mexican-Americans are the fastest growing immigrant group in the United States and they are both younger and expected to live longer than other groups. Yet they are the most insecure in relation to funding retirement. Even when Mexican-American workers are eligible to participate in retirement savings plans at work, they have low participation rates. We analyze data from a Chicago area survey in light of broader anthropological and economic scholarship to argue that Mexican-Americans’ collectivist values influence the choices they make about how to build assets and resources differently from other Latino groups. Latinos are a diverse group by national origin, citizenship and immigration status, characteristics that strongly influence their employment prospects, asset building and retirement savings and security. Financial policy makers need to understand the heterogeneity of financial behavior within the Hispanic community. The collectivist informal economy of Mexican immigrants and their children is at odds with the formal defined contribution retirement savings system, which is geared toward both autonomous individuals and higher-income workers who benefit from the program’s tax deductions. Since these plans penalize participants who withdraw funds before retirement age, they can be deleterious to those who expect both to loan funds to and to borrow money from members of their collectivist social networks.

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  1. Mexican Americans include first generation immigrants who were born in Mexico and migrated to the US, as well as second generation Mexicans who were born in the US to first generation parents and third+ generation Mexicans who were born to second+generation Mexicans.

  2. See a more detailed description of collectivism and collectivist behavior in the next page.

  3. Source: Social Security Factsheet for Demographic Groups

  4. Second Federal Savings and Loan in Chicago appreciated the important function and role of tandas among their Mexican immigrant community, and took the unprecedented step of formally recognizing a loan applicant’s tanda receipts among the documents submitted for their credit rating (Mark Doyle and Matt Brophy, personal interviews, 2011).

  5. Another potential limitation, which was discovered in our focus group research, is that Mexicans do not classify tanda as savings. Hence when focus discussion leaders inquired about savings, participants did not mention participation in tanda. They provided Information about participation in tanda only in response to a direct question, “Do you participate in tanda.”

  6. The non-Latino Black and White sample survey included questions about the collectivism of respondents, but it did not gather information about respondents’ savings.

  7. Unfortunately, neither the ACS 2005 nor the 2000 5 % Census sample contains coverage of Kane, McHenry or Will counties individually. Kane and McHenry counties are combined with Kendall County, while Will is combined with Grundy County.

  8. Significant differences between the samples persisted after we limited the ACS and Census sample to only include the head of the household, as is the case in the CAS data.

  9. We originally included the person’s generation status, which tracked whether they were born abroad, and for those who were born in the US whether they were second or third generation immigrants. Because many respondents did not answer the question about parents’ country of birth, generation status could not always be assigned. As a result, we used the respondent’s country of birth in the regression. This indicator of US birth is a collapsed version of generation, where the respondent is either first generation or higher.


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We are grateful to the National Endowment for Financial Education for generous support of this research. See the final reports: See Richman et al. 2012 and Richman et al. 2008.

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Correspondence to Karen Richman.

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Saad-Lessler, J., Richman, K. The impact of collectivism on savings behavior: a case study of Mexican-Americans and non-Mexican Latinos. Rev Econ Household 12, 493–515 (2014).

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  • Mexicans
  • Immigration
  • Retirement
  • Collectivism
  • Assets
  • Culture
  • Rituals

JEL Classification

  • J14
  • J32
  • Z13