Despite the worldwide diffusion of multiculturalism policies, scholarly debates still continue as to whether or not they effectively contribute to immigrant integration. Based on a comparative social policy perspective, this study attempts to fill this void in research. In particular, we shed light on the possibility that the effect of multiculturalism varies across countries depending on social policy arrangements. Using a cross-national sample of approximately 24 thousand immigrant children in 30 OECD countries, a series of hierarchical linear modeling analyses has been conducted. The results show that the strength of multiculturalism institutionalized at the country level is positively associated with immigrant children’s educational performance at the individual level. However, such an association appears to differ markedly across countries. We find multiculturalism’s intended effect much smaller or often negative in countries characterized by a high level of welfare generosity. Such a ‘corrosive effect’ of welfare generosity suggests that multiculturalism may produce either intended or unintended consequences depending on institutional dynamics in social policy development.