We examine the question of whether identity is just a `label' or whether it matters in affecting outcomes, such as education, employment or political orientation, using data on Turkish and ex Yugoslavian second generation immigrants in Austria and Germany. We begin with an empirical investigation of identity formation, with a focus on parental investment in their child's identity, and use this to understand the impact of the child's own identity on own outcomes, a generation later. The results suggest that identity does not have a significant effect on education, employment and political orientation, thus suggesting that a strong ethnic/ religious minority identity does not constrain the second generation or hamper socioeconomic integration.