We study cultural integration as an equilibrium outcome of marital matching along cultural and education lines and intrahousehold investment decisions regarding fertility and cultural socialization. Our model allows us to identify cultural-ethnic-group-specific investment parameters and spousal preferences for marital matching. Structural estimates reveal a strong demand to preserve cultural identity on the part of immigrants and limited acceptance of the immigrants' cultural diversity on the part of natives. Furthermore, these estimates reveal a substantial heterogeneity of the parental value of children's education across cultures. Nonetheless, our estimates simulate substantial—though heterogeneous—cultural integration rates across immigrant groups.

We analyze the contribution of legal status incentives on the marriage choices of natives and migrants. Access to legal status reduces the probability of immigrants intermarrying with natives by 40% and increases the hazard rate of separation for intermarriages by 20%. We develop and estimate a multidimensional equilibrium model of marriage, fertility, and separation, where individuals match on observed and unobserved characteristics. Allowing for trade-offs between cultural distance, legal status, and other socioeconomic spousal characteristics, we quantify the role of legal status and the strength of cultural preferences and evaluate the welfare consequences of granting legal status to immigrants.