Immigrants Well-Being and the Importance of Access to Financial Markets

Project leader

Funding source

Forte - Swedish Research Council for Health, Working Life and Welfare

Project Details

Start date: 01/01/2011
End date: 31/12/2013
Funding: 3215000 SEK


Studies on the economic situation of immigrants have been very concerned with the labour market and unequal treatment in hiring, promotion and wage setting. The financial market and its importance for the situation of the immigrants on the other hand, have met with much less interest. Wealth and access to the financial markets may, however, be important for the situation of immigrants in several ways. Since financial markets provide important tools for enhancing welfare -- tools to transfer resources across time and across states of the world, to make payments, to mitigate risk and to fund investments -- low rates of participation within the mainstream financial sector and relative more reliance on more expensive alternative credit by immigrants are associated with lower welfare. One explanation for this negligence in research may be the lack of good registered data. This project aims to fill this lacuna by utilizing a data set including all register information on individuals from both the mainstream financial market and the pawn brokers’ association, supplemented by data from SCB. This will enable us to analyze financial market decisions and outcomes of immigrants relative to those of natives in both mainstream and alternative credit markets while controlling for individual characteristics. Among other things we will investigate the following research questions: i); if there is discrimination in the consumer credit market against immigrants, ii); if borrowing from alternative creditors will relieve or exacerbate financial distress and iii); if financial distress is transferred from the parents to their children. In addition to documenting differences between (first and second generation) immigrants and natives, we will highlight observed gender diversity. We will also link our results with the well-being of immigrants in other markets like the housing and labour market.

Last updated on 2017-29-03 at 17:13