Immigration Policy and Long-Run Assimilation

We study the migration and return decision in presence of heterogeneity in preferencence for home consumption, when both the stability of the origin country and the possibility to recover abroad are uncertain. The model shows the self-selection between temporary and permanent immigration. Restricitive immigration policies incentivize permanent migration -thus reproduction abroad. Then, we address the problem of immigrants’ assimilation: as long as assimilation is an intergenerational process, immigration policies can have have very long-lasting effects. We find that restrictive immigration policies can cause lower assimilation of the future generations. This issue is more serious when the cultural distance between the sending and the receiving country is higher. Since concerns for assimilation are an important cause of closed-door policies, our findings cast some doubts over the effectiveness of such policies in the long run. We find evicence of such effects after the 1973 Anwerbestopp in Germany.