All households need wealth for economically secure and create opportunities for the next generations. A focus on the wealth position of immigrant households illuminates how immigrants are economically integrated into the host society and provides a unique perspective on their financial well-being. Based on the 2006-2016 Italian Survey of Household Income and Wealth (SHIW), we study the differences in wealth accumulation between immigrants and natives. The quantile regression analyses indicate that immigrants hold significantly less net wealth than their native counterparts throughout the wealth distribution. The wealth gap persists even after controlling for demographic characteristics and other influencing factors including income, level of education, risk profile, etc. When compared to natives, immigrants are less likely to participate in the formal financial markets and their portfolio choices also differ from those of the native-born. The likelihood of holding risky assets, government securities, homeownership, and businesses are reduced by immigrant status. Homes are the largest investment that all households make and by far the principal component of the household’s wealth composition. Mortgage loan is the key to become a homeowner. We investigate the pricing difference of mortgages between immigrants and natives in Italy using a unique and large dataset on the granted loan contract. We find that immigrants pay substantially higher than natives for mortgages. The interest rates differential persists high and significant even after controlling for different risk factors, mortgage characteristics and personal characteristics of borrowers. The Oaxaca-Blinder decomposition reveals that 80 percent of the observed differential interest rate does not depend on the observable characteristics. The empirical evidence provided here indicates that these differentials are likely caused by discrimination. Our findings suggest that there is lack of notable advances toward economic integration of immigrants in Italy and additional policies which might help to ease the process of integration and contribute to reducing the wealth inequality through promoting of financial products especially for immigrants, easy access to the credit markets, and the removal of obstacles to the access to the credit markets.
I ricchezza per essere economicamente sicure e creare opportunità per le prossime generazioni. Un'attenzione particolare alla posizione patrimoniale delle famiglie immigrate illumina il modo in cui gli immigrati sono integrati economicamente nella società ospitante e fornisce una prospettiva unica sul loro benessere finanziario. Sulla base dell'indagine italiana sul reddito e la ricchezza delle famiglie 2006-2016 (SHIW), studiamo le differenze nell'accumulo di ricchezza tra immigrati e nativi. Le analisi di regressione quantile indicano che gli immigrati detengono una ricchezza netta significativamente inferiore rispetto alle loro controparti native in tutta la distribuzione della ricchezza. Il divario di ricchezza persiste anche dopo aver controllato le caratteristiche demografiche e altri fattori di influenza tra cui reddito, livello di istruzione, profilo di rischio, ecc. Rispetto ai nativi, gli immigrati hanno meno probabilità di partecipare ai mercati finanziari formali e anche le loro scelte di portafoglio differiscono da quelle dei nativi. La probabilità di detenere attività rischiose, titoli di stato, proprietà della casa e imprese è ridotta dallo status di immigrato. Le case sono il più grande investimento che tutte le famiglie fanno e di gran lunga la componente principale della composizione patrimoniale della famiglia. Il mutuo ipotecario è la chiave per diventare proprietario di una casa. Indaghiamo la differenza di prezzo dei mutui tra immigrati e nativi in Italia utilizzando un set di dati unico e di grandi dimensioni sul contratto di prestito concesso. Scopriamo che gli immigrati pagano sostanzialmente più dei nativi per i mutui. Il differenziale dei tassi di interesse persiste elevato e significativo anche dopo aver controllato diversi fattori di rischio, caratteristiche dei mutui e caratteristiche personali dei mutuatari. La decomposizione di Oaxaca-Blinder rivela che l'80 per cento del tasso di interesse differenziale osservato non dipende dalle caratteristiche osservabili. Le prove empiriche fornite qui indicano che questi differenziali sono probabilmente causati dalla discriminazione. I nostri risultati suggeriscono che mancano notevoli progressi verso l'integrazione economica degli immigrati in Italia e politiche aggiuntive che potrebbero aiutare a facilitare il processo di integrazione e contribuire a ridurre la disuguaglianza di ricchezza attraverso la promozione di prodotti finanziari in particolare per gli immigrati, un facile accesso al credito mercati e la rimozione degli ostacoli all'accesso ai mercati del credito.
Essays on Economic Integration of Immigrants / Uddin, MD TASLIM. - (2020 Mar 19).
Essays on Economic Integration of Immigrants
UDDIN, MD TASLIM
2020-03-19
Abstract
All households need wealth for economically secure and create opportunities for the next generations. A focus on the wealth position of immigrant households illuminates how immigrants are economically integrated into the host society and provides a unique perspective on their financial well-being. Based on the 2006-2016 Italian Survey of Household Income and Wealth (SHIW), we study the differences in wealth accumulation between immigrants and natives. The quantile regression analyses indicate that immigrants hold significantly less net wealth than their native counterparts throughout the wealth distribution. The wealth gap persists even after controlling for demographic characteristics and other influencing factors including income, level of education, risk profile, etc. When compared to natives, immigrants are less likely to participate in the formal financial markets and their portfolio choices also differ from those of the native-born. The likelihood of holding risky assets, government securities, homeownership, and businesses are reduced by immigrant status. Homes are the largest investment that all households make and by far the principal component of the household’s wealth composition. Mortgage loan is the key to become a homeowner. We investigate the pricing difference of mortgages between immigrants and natives in Italy using a unique and large dataset on the granted loan contract. We find that immigrants pay substantially higher than natives for mortgages. The interest rates differential persists high and significant even after controlling for different risk factors, mortgage characteristics and personal characteristics of borrowers. The Oaxaca-Blinder decomposition reveals that 80 percent of the observed differential interest rate does not depend on the observable characteristics. The empirical evidence provided here indicates that these differentials are likely caused by discrimination. Our findings suggest that there is lack of notable advances toward economic integration of immigrants in Italy and additional policies which might help to ease the process of integration and contribute to reducing the wealth inequality through promoting of financial products especially for immigrants, easy access to the credit markets, and the removal of obstacles to the access to the credit markets.File | Dimensione | Formato | |
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