Train or hire? Labour immigration and firms’ investments in the skilling of workers

We investigate whether an increase in labour immigration affects firms’ investments in apprentices. We analyse the building and construction (BaC) industry in Norway during a period when labour immigration into this sector increased considerably, with the largest increase coming after the 2004 EU enlargement. We exploit the difference in immigrant inflow across licensed and non-licenced business areas to identify the effect of labour immigration on apprenticeship investments using two empirical approaches: an instrumental variables (IV) framework and a difference-in-differences (DD) framework. We find that the inflow of immigrants reduced firms’ investments in apprentices. The results are robust to several robustness checks.