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Immigrant-native differences in stockholding: The role of cognitive and non-cognitive skills

Marc-André Luik and Max Steinhardt ()

No 164, HWWI Research Papers from Hamburg Institute of International Economics (HWWI)

Abstract: This paper provides new evidence on native-migrant differences in financial behavior by analyzing the role of noncognitive and cognitive skills. We make use of data from the Health and Retirement Survey (HRS) which is a longitudinal household survey of the older U.S. population containing detailed information about demographic characteristics, financial assets and personality traits of household members. In line with previous studies, we find a substantial gap in stockholding between immigrant and native households. Estimates from a random effects model suggest that cognitive and non-cognitive skills, including personality concepts and economic preferences, are important drivers of stockholding and explain part of the differences between natives and immigrants. These findings are supported by results from a Blinder-Oaxaca decomposition analysis. Our paper therefore delivers first evidence that differences in non-cognitive and cognitive skills contribute to the explanation of the financial market participation gap between natives and immigrants.

Keywords: Stockholding; Immigrants; Personality traits; Decomposition (search for similar items in EconPapers)
JEL-codes: D14 G02 G11 J61 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-dem, nep-mig and nep-neu
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Journal Article: Immigrant-native differences in stockholding – The role of cognitive and non-cognitive skills (2016) Downloads
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