Ethnic persistence, assimilation and risk proclivity

Holger Bonin,Klaus F Zimmermann,Amelie Constant,Konstantinos Tatsiramos

doi:10.1186/2193-9039-1-5

Holger Bonin, Klaus F Zimmermann + Show 2 more

Open Access

https://doi.org/10.1186/2193-9039-1-5

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Abstract

Abstract Abstract This paper investigates whether immigrants adapt to the attitudes of the majority population in the host country by focusing on the effect of ethnic persistence and assimilation on individual risk proclivity. Employing information from a unique representative German survey, we find that adaptation to the host country closes the existing immigrant-native gap in risk proclivity by reducing immigrants’ risk aversion and explains the systematic variation in the observed risk attitudes across immigrants of different origins. Our analysis of the adaptation behavior of immigrants suggests that acquisition of social norms is an essential factor in the formation of individual attitudes. JEL classification D1, D81, F22, J15, J16, J31, J62, J82

Highlights

Risk attitudes are a personal trait that affects human behavior and economic decisionmaking in many domains of life
This paper aims at testing this hypothesis by studying the adaptation process of immigrants to the risk proclivity of the majority population in the host country
4.1 Explaining general risk proclivity without factors We turn to the core part of our analysis, where we study the relationship between the individuals’ ranking on the ethnic persistence and assimilation scales, and their revealed risk proclivity controlling for a number of other determinants

Summary

Introduction

Risk attitudes are a personal trait that affects human behavior and economic decisionmaking in many domains of life. We construct measures of ethnic persistence and assimilation to help explain the differences and correlations in declared risk behavior. Factor 1 shows strong positive correlations with the immigrants’ attachment to their country of origin, and the use of a foreign language at home This pattern of factor loadings suggests that a higher value on the scale of factor 1 is associated with a stronger commitment of the immigrants to their origin. This indicates a form of ethnic separation from the host country. Surprisingly, when we compare immigrants born abroad and in Germany, the only group showing a significant improvement on the assimilation scale is the Turks

Empirical results

Findings

Conclusion