Working Paper: CEPR ID: DP18236
Authors: Mark Gradstein; Moshe Justman
Abstract: The cultural diversity that new immigrants bring to the host economy is potentially beneficial for the productivity of both immigrants and natives, but immigrants must assimilate to some extent for these benefits to be realized. In general, immigrants assimilate more slowly than natives would like, as they ignore the external material benefits of assimilation for natives and their resistance to foreign cultural influences. We develop a formal framework that highlights the complementarity between immigrants’ cultural assimilation, economic integration, and investment in human capital, indicating the scope for mutually beneficial policies, offering immigrants material incentives to assimilate more rapidly.
Keywords: immigration; cultural diversity; economic growth; social integration
JEL Codes: O11; Z10; Z18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cultural diversity (Z10) | economic productivity (O49) |
| cultural assimilation (Z19) | economic productivity (O49) |
| immigrants' assimilation (K37) | economic productivity (O49) |
| cultural distance (Z10) | economic productivity (O49) |
| immigrants' attachment to cultural traditions (F22) | immigrants' assimilation (K37) |
| material benefits of assimilation for natives (I39) | immigrants' assimilation (K37) |
| policies providing material incentives for assimilation (J68) | immigrants' assimilation (K37) |
| immigrants' assimilation + economic integration + investment in human capital (J68) | economic productivity (O49) |
| lack of intervention (I24) | immigrants' segregation (K37) |
| immigrants' segregation (K37) | lost economic opportunities (F69) |