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Immigrant-Native Differences in Stockholding – The Role of Cognitive and Non-Cognitive Skills

25.06.2015 | HWWI Research Paper | von Marc-André Luik, Max Friedrich Steinhardt

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 e ects model suggest that cognitive and non-cognitive skills, including personality concepts and economic preferences, are important drivers of stockholding and explain part of the di erences between natives and immigrants. These findings are supported by results from a Blinder-Oaxaca decomposition analysis. Our paper therefore delivers first evidence that di erences in non-cognitive and cognitive skills contribute to the explanation of the financial market participation gap between natives and immigrants.


Dr. Max Friedrich Steinhardt