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 also highlight the importance of the assimilation of the past generation and the role of the majority group in the assimilation of ethnic minorities. First, there is an inverted $U-$shaped relationship between the degree of tolerance of the majority individuals and the average level of assimilation in the society. Second, more tolerance from the majority group generates positive externalities for the minority group, while each minority's individual assimilation effort affects the welfare of the 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 minority individuals 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 tolerance toward the majority group.