We look at the dynamics of identity and immigration in a setting in which political decisions regarding immigration are made by a majoritarian democratic process and location is endogenous. We introduced an agent-based model that allowed us to explain the following facts: When individuals are not allowed to choose their own location, the ratio of immigrants in the population is close to optimal and assimilation works well. On the contrary, when individuals are allowed to move, clusters of different types of populations form. This has the following consequences: assimilation becomes more difficult by formation of closed communities and therefore the native identity can only survive if a large level of immigration is supported by individuals protected from its consequences and vote with local information or consideration. Even in the latter case, temporary outbursts of anti-immigration policy can occur. These results should be understood in the recent context of increasing salience of identity concerns and the following positive electoral results for the so-called populist movements in Western countries.