Immigration, Diversity and Growth

International migration offers the potential for mutual economic gain-for migrants and their host countries-through an efficient reallocation of human resources and a fruitful meeting of cultures, even as cultural frictions may threaten their shared social fabric. Immigrants and natives have a common interest in prospering through cooperation but may have opposing views on how quickly immigrants should assimilate. Confrontation between the two populations can lead to immigrants culturally disengaging from the mainstream, and retard their economic integration. This paper analyzes these reciprocal cultural and economic effects, indicating the scope for growth-promoting and welfare enhancing assimilation policies.