Immigration Article of the Day: Immigration and Credit in America by J. Anthony Cookson, Benedict Guttman-Kenney, & William Mullins

Immigration and Credit in America by J. Anthony Cookson, Benedict Guttman-Kenney, & William Mullins, Kilts Center at Chicago Booth Marketing Data Center Paper Forthcoming

Abstract

Immigrants enter the U.S. with a blank credit history, regardless of age or home country experience. Motivated by this, we study the assimilation of immigrants into American consumer credit markets. We find immigrants are positively selected: immediately upon credit market entry, immigrant credit scores are 20 to 35 points higher than non-immigrants, on average. Despite their greater creditworthiness, immigrants–especially those who arrive later–are delayed in their credit access and have lower average credit card limits for up to a decade. Immigrants are also less likely to access auto loans and mortgages, a gap that persists into their forties and is unexplained by geographic fixed effects.

KJ