A human capital model is developed that distinguishes between ethnic-specific skills (applicable only to a specific indigenous or immigrant group) and shared or general skills. An important determinant of assimilation is the extent to which these two forms of human capital are complements, thus promoting both assimilation and ethnic persistence, or anti-complements, promoting either assimilation or ethnic retention but not both. Implications of the model are developed for various applications including intermarriage, the effects of group size, language and religion as a basis for ethnic mergers, and the transfer society as a potential barrier to assimilation.
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In some usage, an ethnic group is defined residually after controlling for such characteristics as race, religion, or place of origin. This study uses the term broadly to include groups defined by these characteristics as well. For simplicity, these characteristics are assumed to be unambiguous and well known, so that every member of the population knows the ethnicity of every other member.
Individuals who distance themselves from ethnic particularism may view themselves as having no ethnicity. Typically, however, people who share this viewpoint develop their own social structures and thus create the equivalent of a more or less new ethnicity. The fact that these people have origins in different ethnic groups is not relevant for the distinction between ethnic-specific and shared types of human capital.
A similar externality with respect to the general education process is ignored here for the sake of simplicity. If the term ω*h Y h E /α were to be subtracted from the right-hand side of Eq. 5, the only effect on Eq. 7 would be to replace the constant parameter ω with (ω + ω*). The following equations would have to be adjusted accordingly, but there would be no substantive difference in their interpretation.
A sufficient (but not necessary) condition for this slope to be negative is ω ≤ 0, meaning that the external effects of general education on ethnic education (and vice versa) are non-positive.
The expansion path connects the tangencies between the indifference map and a family of PPF curves for which ω = 0, only one of which is shown in Fig. 1.
Note that this definition applies symmetrically to all groups, including those described as “dominant” because of their large size or cultural influence.
These papers focus on measuring the degree of ethnic assimilation rather than an analysis of its determinants, but their classification of ethnic groups for this purpose is much the same as the four quadrants illustrated in Fig. 3 of the present paper.
In common parlance, the term “assimilation” often combines both concepts. For example, American Jewry in the early twentieth century was an immigrant community that viewed assimilation as a highly desirable goal, but in the late twentieth century was more likely to view it as a serious problem. The earlier community understood assimilation as a movement from quadrant II into quadrant I, investing heavily in h Y often at the expense of investments in h E . The later generation was centered in quadrant I but included many people in quadrant IV whose connections to the Jewish community were weak or ambivalent. While both communities used the term “assimilation,” the earlier period used it in its broader sense (quadrants I and IV) while the narrower usage (quadrant IV) is implied during the later period.
The rate of return to changing one’s ethnic identity is the net present value of the gain in utility divided by the net present value of the cost of switching. If everyone faces the same prospects of gain and the same cost function for acquiring human capital specific to the new ethnicity, all differences in rates of return arise from individual differences in learning ability, α, and in the amount of ethnic human capital h E specific to the origin group.
This analysis implicitly assumes that the content of ethnic education for the two groups is mutually compatible or at least neutral (i.e., does not generate hostility) with respect to each other.
Size is much less important for a group illustrated by Fig. 4a, where people in different ovals may marry each other and where the “exceptional” members with high out-marriage rates would tend to be relatively few and among the least educated.
This condition is less likely to be met by immigrants than by their native-born children, although immigrants in small immigrant communities have a stronger incentive to learn the language of the larger society and thus are more likely to intermarry.
The image of a “cash cow”—yielding a steady flow of income with no diminution of capital—meets the fable of the “goose that lays a golden egg”—a source of easy income only as long as it remains intact.
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This paper has evolved over several years during which it has benefited from interactions with many people. An earlier version was presented at the Second Annual Migrant Ethnicity Meeting (IZA) and at the 2006 Annual Meeting of the European Society for Population Economics (ESPE), and a much earlier version at the Twelfth International History Congress, all of which were sources of helpful suggestions. The author is especially grateful to Barry R. Chiswick, Alan Olmstead, Timothy Hatton, Guillermina Jasso, and some anonymous referees for their encouragement and comments. The author, however, takes full responsibility for the contents of this paper.
Responsible editor: Klaus F. Zimmermann
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Chiswick, C.U. The economic determinants of ethnic assimilation. J Popul Econ 22, 859 (2009). https://doi.org/10.1007/s00148-008-0190-y
- Human Capital
- Ethnic Intermarriage