Cultural Assimilation: Learning and Sorting

Résumé

Immigration from poorer source countries is larger than from richer countries, so that poorcountry immigrants have greater exposure to co-ethnics, leading to fewer incentives tolearn the local culture and assimilate. In this paper, the exposure channel through whichsource country richness affects assimilating immigration is modelled through neighbour-hood location choices and incentives to learn the local culture in the host country. Twoequilibrium outcomes are identified, in which, there is either only assimilating immigra-tion in at least one neighbourhood of the host country (sorting equilibrium) when immi-gration is from a rich source country, or there is some non-assimilating immigration inall neighbourhoods (mixed equilibrium) when immigration is from a poor source country.The presence of this exposure channel is tested using data from the Longitudinal Survey ofImmigrants in Canada: waves 1-3. Learning, rather than sorting into co-ethnic communi-ties, is the main factor operating in the exposure channel between source country richnessand assimilating immigration.