Intergenerational Assimilation of Minorities : The Role of the Majority Group

We develop a dynamic model of assimilation of ethnic minorities that posits a tradeoff between higher productivity and wages and greater social distance to the culture of origin. We alsohighlight the importance of the assimilation of the past generation and the role of the majoritygroup in the assimilation of ethnic minorities. First, there is an inverted U-shaped relationshipbetween the degree of tolerance of the majority individuals and the average level of assimilationin the society. Second, more tolerance from the majority group generates positive externalitiesfor the minority group, while each minority’s individual assimilation effort affects the welfare ofthe majority individuals differently depending on the initial minority assimilation level. Finally,the more the majority individuals are tolerant toward the minority group, the more the minorityindividuals will assimilate to the majority group, while the reverse is not always true. In fact,when there is too much assimilation, the majority group may reduce its degree of tolerancetoward the majority group