Western countries are experiencing rapid demographic change, with immigrants from different backgrounds living in the same host countries. The literature has mainly analyzed how natives react to these demographic changes, treating immigrants as a homogeneous group without agency.

This paper adopts a different strategy and examines how immigrants react when confronted with other types of immigrants. Essentially, we develop a framework that considers that there is a "native" population, the ingroup, and two types of outgroups, OG1 and OG2. OG1 are culturally closer to the natives than OG2. This article examines the reactions of OG1 when exposed to OG2 population growth. First, similar to Abascal (2015), we aim to investigate whether OG1 feel closer to the native population when exposed to OG2 population growth.

Second, we advance this research by investigating how this response occurs. Specifically, we examine how OG1 attempt to actively differentiate themselves from OG2, considering two strategies: i) emphasizing cultural differences between OG2 and natives, essentially discriminating against OG2; ii) assimilating to host country values.

We test various implications of the model using in Spain - an ideal case in which there is a clear OG1 (Latinos) and OG2 (Moroccans) - with observational data and an experiment. The treatment group is informed about the huge increase in the Moroccan population, while the control group is not. After the information treatment, they answer questions about their perceived similarity to natives, their subjective status, their preference for cultural homogeneity and their social values. Evidence is complemented with obervational analyses.