Trainspotting: 'Good Jobs', Training and Skilled Immigration

38 Pages Posted: 25 Jun 2019

See all articles by Andrew Mountford

Andrew Mountford

University of London, Royal Holloway College - Department of Economics

Jonathan Wadsworth

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); IZA Institute of Labor Economics; William Davidson Institute; Royal Holloway College University of London

Abstract

While skilled immigration ceteris paribus provides an immediate boost to GDP per capita by adding to the human capital stock of the receiving economy, might it also reduce the number of 'good jobs', i.e. those with training, available to indigenous workers? We analyse this issue theoretically and empirically. The theoretical model shows how skilled immigration can affect the sectoral allocation of labor and how it may have a positive or negative effect on the training and social mobility of native born workers. The empirical analysis uses UK data from 2001 to 2018 to show that training rates of UK born workers have declined in a period where immigration has been rising strongly, and have declined significantly more in high wage non-traded sectors. At a more disaggregated level however this link is much less strong, though there is evidence of different training effects of skilled immigration across traded and non-traded sectors. Hiring of UK born workers in high wage non-traded sectors has also been negatively affected by skilled immigration, although this effect is not large. Taken together the theoretical and empirical analyses suggest that skilled immigration may have some role in allocating native born workers away from 'good jobs' sectors but it is unlikely to be a major driver of social mobility.

Keywords: immigration, training, income distribution

JEL Classification: J6

Suggested Citation

Mountford, Andrew and Wadsworth, Jonathan, Trainspotting: 'Good Jobs', Training and Skilled Immigration. IZA Discussion Paper No. 12409, Available at SSRN: https://ssrn.com/abstract=3408307

Andrew Mountford (Contact Author)

University of London, Royal Holloway College - Department of Economics ( email )

Royal Holloway College
Egham
Surrey, Surrey TW20 0EX
United Kingdom

Jonathan Wadsworth

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
England

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

Royal Holloway College University of London

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Malet Street
London, TW20 0EX
United Kingdom

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