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

This paper provides new evidence on immigrant-native differences in financial behavior. We use data from the Health and Retirement Study (HRS). Although looking at long-term immigrants, we find a substantial gap in stockholding between immigrant and native households. Estimates from a probit model suggest that cognitive and non-cognitive skills are important drivers and explain part of the difference between natives and immigrants. These findings are supported by results from a Blinder-Oaxaca decomposition analysis. Our paper 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. (C) 2016 Elsevier B.V. All rights reserved.