Financial Literacy: A Comparison Between Chinese Families in Canada and China

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We support our students and recognize excellence in programs of study. This contribution comes from Zhaowen Mei, Msc graduate student, Human Ecology, and is an abstract titled “Financial Literacy: A Comparison Between Chinese Families in Canada and China.”

Financial literacy is important because it affects our daily financial lives as well as long run family economic well-being. Recently, Statistics Canada conducted a national study on financial knowledge of Canadians. According to its results, the average financial knowledge score of Canadians was 67%, and immigrants did even worse (Keown, 2011). The present study focuses on the financial literacy of Chinese-Canadian families and Chinese families still living in China because China represents the primary source country of immigration to Canada and their financial literacy is under-researched.

The purpose of this paper is to: 1) examine the financial literacy of Chinese-Canadian families and Chinese families; 2) explore the associations between financial literacy and personal demographic characteristics and financial behavior; 3) compare financial literacy of Chinese-Canadian and Chinese families; and 4) compare financial literacy of the two sub-groups with the national sample of Canadians examined in Keown’s study (2011).

Methods:

The present study is based on the research of Keown (2011), which used a standardized financial knowledge quiz to measure the financial knowledge levels of Canadians. This study adopted the same quiz for the target groups, but adjusted a few questions and translated the quiz into Chinese for participants in China.

Key findings:

The results show that both groups did very well on the quiz. Their scores were 91.1% and 82.1% for Chinese-Canadian and Chinese respondents respectively. The factors influencing their financial literacy were education and country of residence. Gender, age and labor force status showed no obvious effect. The results of this study, when compared to those of the larger, more representative sample in Keown’s study (2011), seem to support the association between financial literacy and immigrant status and household income. Specifically for immigrant status, Statistics Canada (Keown, 2011) demonstrated that Canadian citizens by birth had an average score of 67.9% on the quiz, 4.9% higher than the long-term immigrants and 10.3% higher than the recent immigrants. In my study, all four Chinese-Canadian participants are long-term immigrants, with the length of time since they immigrated to Canada ranging from 15 to 23 years. Obtaining an average score of 91.1%, these immigrant participants not only surpassed the average of the sampled Canadians, but they also did much better than the Canadian-born group (Keown, 2011). Recent immigrants may have a lower level of financial literacy due to unique challenges, such as language and cultural gaps. Policy makers and practitioners should consider resettlement services targeted at new immigrants in order to orient them to the financial environment in Canada.

 

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