Immigrants and Mortgage Delinquency |
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| Authors: | Zhenguo Lin Yingchun Liu Jia Xie |
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| Affiliation: | 1. Department of Finance, Mihaylo College of Business and Economics, California State University, Fullerton, CA;2. Department of Finance, Insurance, Real Estate and Law, College of Business Administration, University of North Texas, Denton, TX;3. Financial Stability Department, Bank of Canada, Ottawa, ON, Canada |
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| Abstract: | This article studies the effect of immigrant status on mortgage delinquency. Due to their different social and economic background, immigrant households may not integrate well into the host society, and therefore are more likely to be delinquent on mortgages than otherwise identical native‐born households. We test this hypothesis by comparing the mortgage delinquency rate between immigrant and native‐born households in the 2009 PSID (Panel Study of Income Dynamics) data, in which all the immigrant households have been in the United States for more than 10 years. We find that, after controlling for observables, those relatively recent immigrants who have been in the United States for 10 to 20 years have a higher mortgage delinquency rate than native‐born, while immigrants who have resided in the United States for more than 20 years are no different from native‐borns. In addition, there is no evidence that the second generation of immigrants is more likely to be delinquent than the third‐or‐higher generations. Our results are robust to potential sample‐selection bias and functional misspecifications. |
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