A shared social identity is potentially an important element in ensuring cooperation and the coordination of actions among individuals when formal institutions for achieving these ends are weak. But the construction of group identity also leads to the creation of in-groups and out-groups and thus, the possibility of conflict as people born and raised with diverse identities are compelled to interact due to resource competition, market forces, etc.
These contrasting ideas lead to the following question: Under what conditions do increased social diversity within a population – e.g. due to migration, market penetration – raise the potential for conflict as opposed to harmonious social diversity? If ‘group identity’ plays a key role in shaping conflict and cooperation, a related question that requires consideration is as follows: How does increased social diversity affect identity?
To shed light on these questions, we develop a model of cultural transmission with three key features:
(i) individuals carry multiple identities – an immutable ‘cultural identity’ and a ‘bridging identity’ that facilitates cooperation as opposed to conflict across different cultural identities;
(ii) identities are transmitted from parent to offspring and via social groups;
(iii) adults choose which social group to join; and this choice determines the individual’s access to club groups, individual experience of conflict, and identity of one’s offspring.
Our analysis points to three key results. First, increased cultural diversity within a population – e.g. due to immigration – can lead to more (culturally) mixed social groups or increased segregation (along cultural lines) depending on the pace of change. Second, our model predicts a version of the Immigrants’ Paradox – offsprings of immigrants being worse off than their parents – when immigrants with high levels of bridging identity join a population that is culturally segregated. Third, a temporary negative shock to bridging identity can trigger a dynamic process of segregation in the form of outmigration from culturally diverse social groups.
We argue that the theoretical results are consistent with empirical findings on recent episodes of migration and ‘identity shocks’ that have been shown to affect cross-cultural interactions within European countries.
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