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The process of ethnic identity development is similar to the process of identity development in general. Often the precipitating event involves an experience during which the individual encounters prejudice and becomes aware of his or her group's under-representation in some activity or setting. Following this crisis, individuals engage in a period of exploration during which they immerse themselves about their ethnic heritage. I am interested in knowing more about how this process of self-exploration leads to increases in self-esteem?

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In your description, you are assuming that the person in question is part of an ethnic minority. If your question is limited to that situation, you might want to make that more clear. Otherwise ethnic identity is simply one of many parts of general identity, which is a conglomerate of gender identity, religious identity etc., and as such it does not have to be problematic at all. Minorities are in a special situation. – what Oct 22 '13 at 16:21
Could you explain why ethnic identity for Caucasian Americans does not have a central meaning in the formation of a coherent sense of self? – Guest Oct 22 '13 at 16:40
It does have a central meaning for Caucs in the US, since they encounter people of other ethnicities. But they make sense of it in a very different way than members of a minority. And there are people (in other countries) who never encounter anyone from an alien ethnicity. For example I grew up without meeting anyone who was not from my ethnicity, so my ethnicity was not a topic for my formation of self-esteem or identity. I certainly perceived myself as a member of my ethnic group, because I knew of other ethnicities, but I never had a crisis or "immersed myself about my ethnic heritage". – what Oct 22 '13 at 20:03

I would look at Jennifer Crocker and Brenda Major's paper in 1989, Psychological Review, entitled "Social Stigma and Self-Esteem: The Self-Protective Properties of Stigma" which focuses on how being the target of social stigma can actually be protective of one's self-esteem. It's not precisely what you're discussing but it comes the closest in the literature I know and they're discussion and bibliography would likely be a good starting point. Hope this helps!

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