International college students’ impact on the US skilled labor supply

Abstract

While US universities attract millions of international students, we do not know how many of them work in the US after graduating. In this paper we implement an instrumental variable estimation, using quasi-random variations in the tuition charged, and we estimate that between 2003 and 2017 one more international master (or bachelor) student, attracted by a university, increased the US skilled labor supply in the year of graduation by about 0.23 (0.08) employees. Only for STEM students such effect on labor supply was positive and significant, especially after the 2008 Optional Practical Training reform.