Asian Immigrants and Financial Literacy

October 3, 2011University of Maryland

Jinhee Kim

Asian Americans• Asian descents (immigrants, refugees, and native born)

• 5.6% of population about 17.3 million (2010 Census). One of the fastest growing minority groups.

• 67% were foreign born (about half them came after 1990) while a third were native born

• Distinctive culture and language

• Highly concentrated: Half of Asians lived in three states: California, New York, and Texas (Asians accounted for 43% in its population in Hawaii and 12% in California)

Asian Immigrants• East, Southeast, South Asia Varying ethnic differences: Cultural heritages, economic conditions, political

systems, religious practices, and languages

Country of Origin (Eight-tenths of Asian)• Chinese-Americans (3.8 million)• Filipinos (3.2 million)• Asian Indians (2.8 million)• Vietnamese (1.7 million)• Koreans (1.6 million) and Japanese (1.3 million). (Source: 2009 American

Community Survey)

• Other ethnic groups include: Bangladesh, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Nepal, Pakistan, Thailand, and others.

Asian Immigrants

• Stereotype of “model minority” due to higher socioeconomic status compared to other minority groups

• Relatively higher education and income on average

• Ethnic differences (refugees vs. immigrants)• High average and large dispersion (polarization)• Higher median income with higher poverty rate

than non-Hispanic white

Education

Less

than High

school

High Sc

hool

Some Colle

ge

College

Graduate

0

5

10

15

20

25

30

35

14.7

28.5 28.9

17.6

10.314.7 16

19.6

29.4

20.4

TotalAsian

Education

< High school High school Some college College and higher

0

10

20

30

40

50

60

70

80

Asian IndianChinese FilipinoJapaneseKoreanVietnamese

U.S. Census 2009 American Community Survey

Median Household Income

Category 10

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

50221

68780

90429

6921178028

64231

5203951840

TotalAsianAsian IndianChinese FilipinoJapaneseKoreanVietnamese

Median Income per Capita

Median income per capita0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2640929703

37913

3189728725

39117

27931

20794

TotalAsianIndianChineseFilipinoJapaneseKoreanVietnamese

Poverty Rate

Series10

2

4

6

8

10

12

14

16

13.1

8.8

11.8

9.7

13.4

5.2

8.7

14.9

TotalWhiteAsianIndianChineseFilipinoJapaneseKoreanVietnamese

U.S. Census (2007) The American Community

Employment

Asian(%)

AsianIndian

(%)

Chinese (%)

Filipino (%)

Japanese (%)

Korean (%)

Vietnamese (%)

Private workers

81.6 85.50 80.90 81.30 75.00 78.30 80.70

Govn’t workers

12.3 10.30 13.40 15.50 17.80 9.40 9.20

Self-employed

5.8 4.00 5.50 3.10 7.00 11.80 9.70

U.S. Census 2009 American Community Survey

Home Ownership

0

10

20

30

40

50

60

70 65.9

59.455.9

63.5 63.3 64.5

48.8

63.7

TotalAsianIndianChineseFilipinoJapaneseKoreanVietnamese

U.S. Census 2009 American Community Survey

Home OwnershipTotal Asian

Asian Indian

Chinese Filipino Japanese

Korean Vietnamese

Monthly cost/income

37.6% 41.2% 46.3% 48.1% 39.4% 57.5% 56.2%

Median House values ($)

357,100 360,900 428,600 328,700 408,500 387,300 258,100

U.S. Census 2009 American Community Survey

Length of Stay

Foreign born Entry since 19900

10

20

30

40

50

60

70

80

66.859.8

72.1 72.869

58.8

66.3

53.7

40.8

57.8

74.5

52.5

69

59AsianIndianChineseFilipinoJapaneseKoreanVietnamese

U.S. Census 2009 American Community Survey

Speak English Less Than “very well”

Series10

10

20

30

40

50

60

35.7

22.2

46

22.224.8

46.1

54.8

AsianIndianChineseFilipinoJapaneseKoreanVietnamese

U.S. Census 2009 American Community Survey

Bank Account Ownership

• Rhine and Greene (2006) used Survey of Income and Program Participation

• Bank account ownership of U.S. immigrants• Income, net worth, education, family size, length

of stay for Asian’s bank account ownership• Overall, Asians seem to integrate into the

financial market in terms of bank account ownership

Credit

• Avery, Brevoort, and Canner (2009) Federal Reserve Board

• Recent immigrants had somewhat lower credit scores than would be implied by their performance.

• The loan performance of Asians better than the performance predicted by their credit scores. Asians paid interest rates that, on average, were typically lower than, or about the same as, those paid by non-Hispanic whites across all loan.

Asset Ownership• Kim, Chatterjee, & Cho (2011) studied home, business,

financial asset ownerships with New Immigrant Survey

• Differences in asset ownership by ethnic groups

• Significantly different by– Socioeconomic variables: Income and education– Acculturation: Length of stay and English fluency– Country of origin: Asian Indian, Korean, Chinese, Vietnamese,

and Philippines– Demographics: Age, marital status, family size

Financial Literacy Education Resources for Asians

• FDIC Money Smart:

• The Money Smart for Adults instructor-led curriculum consists of eleven training modules that cover basic financial topics.

• The instructor-led version is available in Chinese, Hmong, Korean, and Vietnamese

CreditSmart Asian

• CreditSmart Asian is a three-part series of multilingual guidebooks focused on helping Asian Americans become more informed consumers. Available in Chinese, Korean, Vietnamese and English, the guidebooks provide valuable and culturally relevant information on establishing and maintaining good credit, the steps to homeownership, and the benefits and responsibilities of owning a home.

• CreditSmart Freddie Mac • http://www.freddiemac.com/creditsmart/creditsmart

_asian.html

Visa Asia Pacific MyMoneySkills

• www.MyMoneySkills.com

• Introduced in 2002, this online program offers six modular topics that cover the most relevant information needed to meet the daily financial needs of people of all ages. This online resource is available in English, Korean, Thai, Japanese, Bahasa Indonesia, Malay, Hindi, and Chinese.

Planning for Prosperity: A Financial Guide for New Asian Americans

• The National Coalition of Asian Pacific American Community Development (National CAPACD) and NEFE

• http://nationalcapacd.org/old/NEFE/index.html• To help Asian immigrants learn how to benefit from

the financial institutions and services in the United States.

• Its featured information is available in Cambodian, Chinese, English, Filipino, Hindi, Hmong, Korean, Samoan, Thai, Urdu and Vietnamese.

Summary• Asians are not the same. Many different ethnic groups.• “Model community?” Higher socioeconomic status on average with high

dispersion. • Over two thirds are foreign born while half came since 1990. • New immigrants face challenges in integration into U.S. financial market.• Very limited data and research on financial literacy and financial

management of Asian immigrants.• Some financial literacy education programs translated into Asian

languages are available while a few local communities provide financial counseling and education programs for Asians.

• Overall, limited resources for financial literacy education. High average may mask the needs for financial education of many Asians.

References• Chatterjee, S. & Kim, J. (2011). Asset ownership of recent immigrants: An

examination of nativity and socioeconomic factors. Migration Letters, 8(2), 141-152.• Rhine, S. L. W. & Greene, W. H. (2006). The determinants of being unbanked for U.S.

immigrants. Journal of Consumer Affairs, 40(1), 21-40.• U.S. Census Bureau (2007). The American Community-Asians: 2004. American

Community Survey Reports. • U.S. Department of Commerce, Economics and Statistics Administration, U.S.

Census Bureau (2010). 2009 American Community Survey 1-year estimates [Data summary file]. Retrieved from http://www2.census.gov/acs2009_1yr/prod/SelectPopulationProfile/United_States

• U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau (2011). 2007 Survey of Business Owners. Retrieved from http://factfinder.census.gov/servlet/IBQTable?_bm=y&-filter=SEX;in;001|RACE_GROUP;in;60,61,62,63,64,65,66,67&-geo_id=D&-ds_name=SB0700CSA01&-_lang=en&-fds_name=EC0700A1

Thank you!

• Contact information: jinkim@umd.edu