The Financial Decisions of Immigrant and Native Households: Evidence from Italy

Using rich Italian data for the period 2006-2014, we analyze differences in financial behavior between natives and immigrants in a unified setting covering a wide set of outcomes and including a large set of covariates. We document sizeable gaps between native and immigrant households with respect to wealth holdings and financial decisions. Immigrant household heads hold less net wealth than native along the entire wealth distribution. Immigrant status reduces the likelihood of holding risky assets, housing, mortgages, businesses, and valuables, and it increases the likelihood of financial fragility. Standard regression results are corroborated by a propensity score matching strategy. Years since migration, country of origin, and the pattern of intermarriage also matter. The Great Recession has worsened the condition of immigrants in terms of wealth holdings, home ownership, and financial fragility.