Essays on the Economics of International Students in US Higher Education

Abstract

This dissertation studies the economics of international students in US higher education from three distinct perspectives: (1) who studies in the US and how visa policies influence their decisions; (2) how increases in foreign student enrollment influence US public universities; and (3) the value of US college education for students who return to home. A common theme is the use of large datasets and experimental and quasi-experimental designs to answer policy-relevant questions.

The first chapter, coauthored with Jessica Howell and Jonathan Smith, documents the academic ability of international students who attend US college and examines how the F-1 visa restrictiveness influences that decision. Using data on the universe of SAT takers, we show that foreign students have higher SAT scores than domestic students. Using an instrumental variable approach, we find that a higher anticipated visa refusal rate decreases the number of foreign SAT takers and the probability of sending an SAT score to a US college. The decreases are larger for high-scoring students.

The second chapter studies the impact of education exports on the outcomes of US public universities. I construct a modified shift-share instrument that exploits variation in the ability to pay for US education and institutions’ historical networks with different economies. I find that an increase in international student enrollment leads to a rise in in-state enrollment and domestic graduates. Per-student spending does not change, and the top SAT quartile increases for enrolled students. More international students also lead to lower published in-state tuition and fewer state appropriations.

The third chapter explores how employers in China value US college education. I conduct a large-scale field experiment by sending over 27,000 fictitious online applications to jobs in China, randomizing the country of college education. I find that US-educated applicants are 18 percent less likely to receive a callback than applicants educated in China, with very selective US institutions underperforming the least selective Chinese institutions. The results are consistent with employers fearing US-educated applicants have better outside options and knowing less about American education. A companion survey of 507 hiring managers finds consistent and supporting evidence for the experimental findings.