Ethnic identity: a theoretical framework

Consider an immigrant who settles in a new country. To find a job, he or she needs assistance in his/her job search. A large number of studies have shown that social networks, i.e., friends and family, play a major role in job searches. The empirical evidence reveals that also in the advanced economies such as the U.S., the informal search methods are a key deterrent of labor prospects (for a survey, see Ioannides and Loury, 2004). Moreover, Kahanec and Mendola (2007) examined the effect of social networks on labor market status and show that the role of social networks may be especially pronounced for an immigrant minority group. Thus, it is assumed that the immigrant can find a job using two different methods: by investing efforts in creating networks with migrants who arrived before he or she did, c, and by investing efforts in creating networks with the natives, e.

The strength of the immigrant's social networks is a function of both the immigrant's personal contacts and his or her identification with the culture, norms, and values of the group. The level of the group's commitment to the individual increases with the individual's similarity to that group's members. Thus, the level of efficiency of the immigrant's investments, c and e, depends on the extent of the relationship between the immigrant and the members of the group. This relationship is affected by the migrant's language acquisition and adaption to the culture and values of the group, among others. Therefore, the immigrant's investments, c and e, represent his or her ethnic identification with the source society and the new society, respectively. It is assumed for simplicity that the immigrant's leisure time, T, is fixed. The immigrant therefore allocates part (or all) of his/her leisure time to creating social networks with immigrants as well as natives. The time required to create social networks with immigrants can differ from that required to create social networks with natives. Let β (β > 0) denote this difference. Clearly, creating social networks with migrants requires less investment than creating them with the local population (β < 1).

The probability of finding a job, p, depends on the immigrant's level of social networking and satisfies: \( \frac{\mathit{\partial}p\left(e,c\right)}{\mathit{\partial}e}>0,\frac{\mathit{\partial}p\left(e,c\right)}{\mathit{\partial}c}>0,\frac{{\mathit{\partial}}^2p\left(e,c\right)}{\mathit{\partial}{e}^2}<0,\frac{{\mathit{\partial}}^2p\left(e,c\right)}{\mathit{\partial}{c}^2}<0 \).

Let w denote the potential wage that the immigrants can receive in the host country. This wage depends on pre-immigration characteristics such as gender, education, religion, economic status, etc.

We normalize the cost of investing in the migrants' self-network to unity and the cost of investing in the natives' network by α (α > 1). α depends on the cultural distance between the host country's and source country's societies. Denote this distance by d. α also depends on the immigrant's different characteristics, such as age and gender. We denote these characteristics by α.

Below, we assume that the time constraint is not bounding, i.e. c + βe < T. We develop the results for a bounding time constraint in the appendix and show that the main results do not change.

Moreover, as the stock of immigrants in the host country, N, increases, the effectiveness (efficiency) of investing in the migrants' network increases: \( \frac{\partial \lambda }{\partial \mathrm{N}}>0 \).

Comparative statics

Let us try to understand the implications of the above results. As noted, the relative cost, α, is affected by cultural distance, d, and personal characteristics, α. The first component, cultural distance, is created by different languages, ethnicities, religions and social norms (see Ghemawat, 2001, Adsera and Pytlikova, 2012). Clearly, as the cultural distance between the source society and host society increases, the immigrant's need to invest more effort to integrate into the host society also increases; thus, the relative cost, α, increases. The second component, personal characteristics, includes the immigrant's age at entry and his or her ability to create social networks. As the immigrant's age increases, his or her ability to acquire the new language and the new social norms decreases, and thus the relative cost, α, increases (see, for example, Chiswick and Miller 2005).

Now suppose that the cultural distance between the host society and the source society, d, increases or, alternatively, that the immigrant's age at arrival increases such that the relative cost of investment in the native compared to migrant network, α, increases. Looking at Figure 3, \( \frac{\alpha_0}{\mathrm{w}} \) increases to level \( \frac{\alpha_1}{\mathrm{w}} \), and thus the immigrant's optimal investment in the native network decreases from \( {\mathrm{e}}_0^{*} \) to \( {\mathrm{e}}_1^{*} \), whereas his or her optimal investment in the migrant network does not change. In other words, cultural distance between the host country and the home country or an older age on arrival decreases the ethnic identity with the host society. In term of the ethnosizer, cultural distance between the host country and the home country or an older age at arrival causes marginalization (if \( {\mathrm{c}}_1^{*} \) is low) or separation (if \( {\mathrm{c}}_0^{*} \) is high).

As shown above, the potential wage that immigrants can receive in their host country depends on pre-immigration characteristics such as gender, level of education, experience, etc. Take two individuals who differ in their gender or education: the first can earn w₀, whereas the second can earn w₁ (w₀ > w₁). Figure 4 shows that the individual with the high potential wage (which derives from college and higher education or vocational training in the source country) increases ethnic identity with the host society as well as the source society. In term of ethnosizer, a high potential wage at entry decreases separation and marginalization.

Finally, suppose that the efficiency level of the relative investment in the immigrant's network, λ(N), increases. This can happen, for example, when the stock of migrants in the host country increases, thus enabling immigrants to obtain more information on the job market. It also can happen when the political strength of the minority group increases as result, for example, of the election of a minority member to parliament. It is easy to see from Figure 5 that the immigrant will increase his/her investment in the migrant network from \( {\mathrm{c}}_0^{*} \) to \( {\mathrm{c}}_1^{*} \), whereas the investment in the native network will not change. It is thus expected that when the stock of immigrants in the host country increases or the minority's political strength increases, the ethnic identity with the source society will increase. In term of ethnosizer, separation or integration will be obtained. This is consistent with the findings of Constant et al. (2009a) and Constant et al. (2006b) of differences in the ethnic identity of different groups that can be followed by the size and political strength of the groups in the host country.

Let us now empirically illustrate these results. We found that the cultural distance between the host country and the home country increases the relative cost of investing in natives' network and thus decreases the ethnic identity with the host society. In their pioneering article, Constant et al. (2009a) demonstrated characteristics that affect the immigrant's state of ethnic identification, i.e., integration, assimilation, separation and marginalization, using data from Germany. Our model explains the results of Constant et al. (2009a), showing that ex-Yugoslavs, who had a smaller cultural (linguistic) distance from Germany than Turks, Greeks, Italians or Spaniards, assimilated better. Christianity is the main religion in Germany; thus, most likely the cultural distance of Muslims from the local population in Germany would be higher than the cultural distance of Christians. Our model also explains the results of Constant et al. (2006b), showing that Muslims are less integrated and more separated than the Christians. Christian immigrants with a college or higher education from their home country integrated well, whereas Muslims did not.

We also found that personal characteristics which decrease the relative cost of investing in the natives' network decrease the ethnic identity with the host society. The personal characteristics contain: age at arrival, years since migration, birth in the destination country, and ability to acquire the new language. If the individual stays in the destination country for a long time or he was born in the destination country after his parents immigrated, then his ethnic identity with the host society will increase. We can use this outcome to explain the following results: Battu and Zenou (2010) examined five variables of oppositional ethnic identity using data from Britain. They found that individuals who were born in the UK are associated with a less oppositional stance for three of the identity variables. In addition, as one would expect, the longer an individual has been in the UK, the less hostile they would be to the native British population. Manning and Roy (2010) also studied the British identity among those living in Britain. They found that the vast majority of those born in Britain think of themselves as British, whereas newly arrived immigrants almost never think of themselves as British. But the longer they remain in the UK, the more likely it is that they do. Casey and Dustmann (2010) also predicted that years since migration increases the identity with the host society but decreases the identity with the source society for both males and females in Germany. Constant et al. (2009) found that as the age at arrival increases, separation and marginalization increase, while integration and assimilation decrease.

Another result which stems from our model is that an individual with a low potential wage has less ethnic identity with the host country as well as with the home country. This explains the result presented by Constant et al. (2009) on the effect of education and experience upon entry into the host country on the immigrant's ethnic identification: low levels of education in the home country result in a stronger attachment to the source society, but college education produces the opposite effect. Constant et al. (2006b) also found that Christian immigrants with a college or higher education from their home country integrated well. It is expected also that females, who usually work part-time and get paid less than men assimilate less than males (see, Machin and Puhani, 2003). Constant et al. (2006b) also showed female Muslims integrated and assimilated less, and separated more, than Muslim men. Casey and Dustmann (2010) found that education is associated with stronger identity with the host society and negatively associated with ethnic minority identity.

Finally, from our model, it seems that when the stock of immigrants in the host country increases, the ethnic identity with the source society will increase. It supports what Constant et al. (2013) found, that residential ethnic clustering strengthens immigrants’ identification with the origin and weakens identification with the host society, using data from Germany. They showed that living in an area where fellow co-ethnic immigrants tend to cluster appears to reduce the likelihood of an immigrant’s self-identification with the host country society. Residential ethnic clustering strengthens immigrants’ affiliation with the respective country of origin.

¹Ethnic identification was captured by asking the respondents if they agreed or disagreed to the following: "In many ways, I think of myself as being [respondent’s majority group in the host country]" and "In many ways, I think of myself as [respondent’s ethnic group]".

²There are two versions of ethnosizer: the one-dimensional and the two-dimensional. In the former, a stronger commitment to the host country necessarily implies a weaker connection to the country of origin and vice versa. However, when considering the second version, the ethnosizer measurement allows simultaneous intensification of connections to the host and source countries.

³These would also have an effect on the policies of the economy of migration (Epstein, 2013).