The economic determinants of ethnic assimilation

A human capital model is developed that distinguishes between ethnic-specific skills (applicable only to a specific indigenous or immigrant group) and shared or general skills. An important determinant of assimilation is the extent to which these two forms of human capital are complements, thus promoting both assimilation and ethnic persistence, or anti-complements, promoting either assimilation or ethnic retention but not both. Implications of the model are developed for various applications including intermarriage, the effects of group size, language and religion as a basis for ethnic mergers, and the transfer society as a potential barrier to assimilation.