Foreign Demand for United States Higher Education: A Study of Developing Countries in the Eastern Hemisphere

Abstract

Foreign student enrollments in the United States have increased rapidly over the past 25 years. The total number increased from 36,494 in 1954 to 336,990 in 1982. While foreign students still represent less than 2% of all higher education enrollments in the United States, this proportion is likely to grow over the next decade as enrollments of American citizens decline. One consequence of the growth to date has been that many colleges and universities depend on foreign students for an important part of their tuition revenue or enrollment-determined budget, and this dependence is also likely to grow over the next decade. Another important consequence of larger flows of foreign students is an increase in immigration to the United States of skilled labor as students adjust their visa status to immigrant. The growing influence of foreign students as consumers of U.S. higher education services underscores the importance of better understanding the nature of this phenomenon. This paper sets forth a model of foreign demand for U.S. higher education and estimates that model for several countries using time-series data for 1954-73. The only countries selected for study are lowor middle-income Eastern Hemisphere nations. These countries were chosen in part because they had the highest rates of enrollment growth in the United States. In addition, these countries were treated similarly by U.S. immigration legislation and were treated differently from Western Hemisphere and Western European countries. In what follows, the theory of student demand for U.S. higher