‘Good jobs’, training and skilled immigration

Abstract

Has skilled immigration into the UK led to a reduction in the training of native-born workers? To address this concern, this paper describes a theoretical model where immigration can affect the training of native-born workers both positively and negatively, and where its effects may differ according to the characteristics of the migrant and of the training firm's sector. It then investigates this issue empirically using UK Labour Force Survey data from 1995 to 2018. At the aggregate level, there is a small positive association between skilled immigration and native training rates. However, a more disaggregated analysis finds that the relationship between immigration and native training depends on the skill level of the immigrant, the skill level of trainees, and the sector into which immigration occurs. In particular, traded goods sectors show a positive association between training of UK-born workers and both unskilled and skilled immigration. In non-traded high-wage sectors, the association between skilled immigration and UK-born training is negative. These findings highlight the importance of allowing for heterogeneous effects from immigration when formulating policy or when modelling immigration's effects across the wider economy.