c. chiswick 1 economic determinants of ethnic assimilation by carmel u. chiswick university of...

C. Chiswick 1

Economic Determinants of Ethnic Assimilation

by

Carmel U. ChiswickUniversity of Illinois at Chicago

and

IZA

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Ethnicity is different from Race or Ancestry

• Children raised in an ethnic environment (family, community) acquire ethnicity-specific human capital.

• Degree of attachment to an ethnic group is enhanced by investment in ethnicity-specific human capital.

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Ethnicity-Specific and Shared Human Capital

• Language• Religion• Family structure (marriage, childrearing)• Intellectual, cultural and social life• Preferences in food, music, art• Attitudes toward Individualism • Occupations • Political Interests (concerns, participation)

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Outline of Presentation

• An Economic Model of Ethnicity

• Two Concepts of Assimilation– Convergence– Pluralism

• External Economies, Diseconomies

• Some Policy Implications

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An Economic Model of Ethnicity• Ethnicity is a z-good with utility-

generating attributes.

• Ethnicity-specific human capital is acquired in the family and community, often at a very young age.

Assumption #1: Only 2 groups (Ethnicity A and Ethnicity B) with a shared General society and the possibility of switching.

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LE = Time spent on Ethnic activitiesLY = Time spent on other consumptionLES = Ethnic-specific education

(experience, socialization)LYS = General educationL* = total time constraint

hE = Ethnic-specific human capital hY = General human capital

Modeling Ethnic Education

Max Ui = U (E, Y) s.t. LE + LY + LES + LYS = L*

E = g(LE, hE)

Y = f(LY, hY )

LYS = φ (hY)

LES = γ (hE) - ω hE hY

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Derived Demand for Human Capital

Ethnic Human Capital

Shared Human Capital

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Derived Demand for Ethnic Human Capital:Strong Preference for Ethnic Goods



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Derived Demand for Ethnic Human Capital: Weak Preference for Ethnic Goods



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Derived Demand for Ethnic Human Capital:No Externalities



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Assumption #2: There is a threshold level of ethnic human capital hE* above which ethnic identity is strong and the propensity to converge is low.

Assimilation by Convergence• Assimilation defined as switching from a specific

ethnicity to the shared ethnicity. Often associated with intermarriage.

• Ethnic human capital is positively related to the productivity of ethnic identification.

– Non-transferability raises the cost of switching as hE increases.

• Assimilation depends on rate of return to switching.

Most likely to occur when hE < hE*

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Propensity to Assimilate by Convergence



hE*

Low Convergence

High Conver-gence

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Assimilation by Pluralism

• Mainstream culture accepts ethnic diversity.• Assimilation defined as participation in the

shared society (acculturation).

Assumption #3: There is a threshold level of shared human capital hY* above which people are acculturated into a common mainstream.

• Assimilation occurs for people with hY > hY*

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Propensity to Assimilate by Acculturation



hY*

High levels of Acculturation

Low levels of Acculturation

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Propensity to Assimilate: A General Model



hE*

Unacculturated Ethnics

ConvergenceZone

hY*

Acculturated Ethnics

Under-class?

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Education Externalities

• Negative interactions (ω < 0)– Ethnic values, attitudes, etc. conflict with the

larger society– Ethnic educational methods conflict with general

education

• Positive interactions (ω > 0)– Ethnic and shared values compatible– Ethnic and shared education mutually reinforcing

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Derived Demand for Ethnic Human Capital:Negative Externalities



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Propensity to Assimilate:Negative Externalities



hY *

hE*


Con-vergence Zone

Unacculturated EthnicsUnder-

class

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Derived Demand for Ethnic Human Capital:Positive Externalities



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Propensity to Assimilate:Positive Externalities



hY *

hE*

Unacculturated Ethnics

Con-vergence Zone


Under-class

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Conclusions #1: Externalities in Education

• Positive externalities in education increase levels of acculturation without stressing convergence.– Raise rates of return to investment in both ethnic and

shared human capital.– Encourage mutual adaptations between shared and

ethnic-specific cultures.

• Negative externalities in education increase convergence (e.g., through intermarriage) but reduce the acculturation of ethnic groups.– Ethnic groups self-selected for low general education.

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Conclusions #2: Convergence vs. Pluralism

• Homogeneous societies discourage acculturation of ethnic groups. – When convergence defines assimilation, individuals are

forced to choose. – Ethnically identified individuals may be self-selected for low

acculturation and voluntary isolation. – Homogeneous model can justify “ethnic cleansing.”

• Pluralistic Societies encourage acculturation of ethnic groups.– Minimizes “problems” associated with ethnicity (raises ω)– Diversity can be a good in its own right. – Benefit from ethnicity-based comparative advantage

End of Slide Show

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Intermarriage Propensities for Two Ethnic Groups

Shared Skills

Ethnic Skills Group A

Ethnic Skills Group B

hEB* hEA*

Low propensity to Intermarry

Low propensity to Intermarry

Intermarriage Zone

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Intermarriage Propensities for ω<0

Shared Skills



hEB* hEA*

Unacculturated Group A

Acculturated Intermarriage Zone

hY*

Unacculturated Group B

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Intermarriage Propensities for ω>0

Shared Skills



hEB* hEA*

Unacculturated Group A

Unacculturated Group B

hY*

Acculturated Intermarriage Zone

c. chiswick 1 economic determinants of ethnic assimilation by carmel u. chiswick university of...

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