We develop a model in which non-white individuals are defined with respect to their social environment (family, friends, neighbors) and their attachments to their culture of origin (religion, language), and in which jobs are mainly found through social networks. We find that, depending on how strong they are linked to their culture of origin, non-whites choose to adopt "oppositional" identities since some individuals may identify with the dominant culture (status seekers) and others may reject that culture (conformists), even if it implies adverse labor market outcomes. We then test this model using a unique data set that contains extensive information on various issues surrounding ethnic identity and preferences in Britain. We find that the social environment of individuals has a strong influence on their identity choice. We also find that those non-whites who have preferences that accord with being a conformist do experience an employment penalty.