The financial behaviour of immigrants to Australia

Gatina, L 2012, The financial behaviour of immigrants to Australia, Doctor of Philosophy (PhD), Economics, Finance and Marketing, RMIT University.


Document type: Thesis
Collection: Theses

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Title The financial behaviour of immigrants to Australia
Author(s) Gatina, L
Year 2012
Abstract Almost 30 per cent of increase in the Australian population in 2010 was brought about by migration and almost half of the growth of the Australian workforce in the last five years was due to the employment of recent immigrants. Thus, immigrants’ financial behaviour can potentially have a huge impact on the Australian financial system and economy.

This thesis analyses (i) the financial behaviour of immigrants; (ii) whether and how this behaviour differs from that of native-born Australians; (iii) how it is affected by both the immigrants’ home-country characteristics such as institutional quality and by Australian immigration policies; (iv) and the well-being of immigrants. More specifically, this research first investigates what affects the financial risk-taking of Australian residents and what influence home-country institutions might have on immigrants’ participation in Australian financial markets. Second, the research analyses the determinants of the saving rates of Australian households, and the relationship between the saving rates of immigrants and their home countries’ characteristics. Third, the research determines the factors that affect whether and how much immigrants remit money abroad, and it examines the effects of the Australian immigration reforms of the late 1990s on remittance outflows from Australia. Finally, the thesis examines the components of the well-being of Australian residents, including if their country of origin is important.

In line with the primary focus of the thesis, special attention is given to the financial aspect of immigrants’ well-being. Two data sources are used to answer these research questions: the Household, Income and Labour Dynamics in Australia (HILDA) Survey and the Longitudinal Survey of Immigrants to Australia (LSIA).

The analysis revealed that the financial risk-taking ability of immigrants is lower than that of other Australians and this difference can be explained by the institutional environment in the immigrant’s country of origin. Immigrants also tend to save less than their native-born counterparts and their saving rates were found to be positively correlated with the quality of institutions and negatively correlated with the national saving rates in their home countries.

This research also found that the remitting behaviour of immigrants depends not only on their income or wealth but also on other factors such as having family members overseas or their type of entry visa. The visa effect, however, changed after the 1999 immigration reform due to the changed profile of the average independent applicant whose earning potential became higher. Finally, it was found that, despite their improved financial situation, immigrants to Australia are less satisfied with their lives than native-born Australians. Findings from this research could serve as a basis for recommendations for policy reform that would enhance the financial development of Australia through the increased immigrant’s participation in its financial markets.
Degree Doctor of Philosophy (PhD)
Institution RMIT University
School, Department or Centre Economics, Finance and Marketing
Keyword(s) Immigrants
Australia
financial behaviour
financial risk-taking
saving rate
remittances
well-being
life satisfaction
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Created: Tue, 03 Sep 2013, 09:14:51 EST by Brett Fenton
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