Improving Access to Financial Services for Immigrants
This project is identifying the main barriers preventing legal resident immigrants from using financial services, and it will develop and test new products to help improve access to those services.
Project Title: Barriers to immigrant use of financial services: The role of language skills, U.S. experience and return migration expectations
Other research team members: Leandro Siqueira Carvalho, RAND Corporation
Immigrants constitute a rapidly growing share of the U.S. population. However, when compared to natives, foreign-born residents are more likely to be "unbanked" (they don’t use the services of a bank), less likely to participate in formal retirement savings programs and have lower levels of financial literacy. This project is investigating the main barriers to the use of financial services faced by immigrants and designing and evaluating new financial education materials that will help immigrants overcome those barriers. Three potential barriers are the focus of the analysis: limited English proficiency, lack of U.S. experience, and return migration expectations. The analysis of new immigrant survey data will allow us to assess the relative importance of these barriers. We will then use the findings from this analysis to develop new materials targeted at specific barriers related to immigration status, and compare their efficacy to existing approaches based primarily on translation of generic financial literacy materials. Using the American Life Panel (ALP) we will administer different versions of the educational material to randomly selected test groups as well as having a control group and, in a follow-up survey, compare their behavioral change. The results from this project will provide valuable information for the design of effective retirement savings programs for this vulnerable population besides being a significant new contribution to the literature on immigrant financial education and literacy.