This paper examines the role of local hostility in determining refugees' cultural and economic assimilation. We exploit plausibly exogenous variation in the allocation of refugees across German regions between 2013 and 2018, and assemble a novel data set on values, preferences, and economic outcomes of refugees, and augment it with information on locals. Constructing an index of "local threat'' that combines several proxies for anti-immigrant sentiments, we find that refugees allocated to more hostile regions converge faster to local culture. Yet, despite the faster cultural convergence, refugees assigned to more hostile regions are less likely to be employed and earn lower wages. We interpret these results as evidence for the "threat hypothesis'' of assimilation.

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