Saving behavior among immigrant and native youth

Abstract

Abstract This study investigates the role of migration background in the saving behavior of youth, with a focus on immigrant generation, national origin, and the influence of cultural and socioeconomic factors. Drawing on a nationally representative dataset of over 28,000 secondary school students in the Netherlands, we employ binary logit models to analyze two dimensions of saving behavior: the likelihood of saving money and the propensity to use bank accounts for savings. Our findings reveal significant disparities in saving behavior among immigrant and non-immigrant youth. Migrant youth are less likely to save overall, and when they do, they exhibit a reduced inclination to use bank accounts for their savings. Furthermore, the study uncovers nuanced patterns within the immigrant youth population. First-generation immigrant youth display lower levels of saving and bank account usage compared to their second-generation counterparts, particularly to those with one foreign-born parent. Distinct national origin effects are observed, as Turkish and Moroccan youth exhibit reduced likelihoods of saving, particularly through bank accounts, compared to Surinamese and Dutch Antillean youth. The results also indicate that the disparities in saving behavior across migration background, immigrant generation, and national origin are partly explained by socioeconomic and cultural forces. Socio-economic status and parental education emerge as key determinants, with higher parental socio-economic resources and education levels positively associated with youth saving behavior and bank account usage. Additionally, religious affiliation, particularly among Muslim youth, contributes to variations in saving behavior due to the prohibition of interest-bearing transactions.

Keywords

• Saving behavior
• Immigrants
• Financial inclusion
• Youth finance
• Inequality