Immigration Restriction and Long-Run Cultural Assimilation: Theory and Quasi-Experimental Evidence

We study the effect of restrictions to immigration on the cultural assimilation of the second generation. Our theoretical model shows that restrictive policies incentivize to permanent immigration individuals with a stronger taste for their original culture. Permanent immigration implies reproduction in the destination country and transmission of cultural traits to the second generation, which will therefore experience a more difficult assimilation. We test this prediction by using the 1973 immigration ban in Germany (Anwerbestopp) as a quasi-experiment, since it only concerned immigrants from countries outside the European Economic Community. Thus, our treatment group is given by the second generation of non-EEC immigrants. Our estimates show that the Anwerbestopp has reduced the cultural assimilation of this generation. This result is robust to several checks, including a triple differences analysis. We conclude that restrictive immigration policies may have unwanted consequences on the process of cultural assimilation.