The Hesitant Hai Gui: Return-Migration Preferences of U.S. - Educated Chinese Scientists and Engineers

Abstract

Managers, administrators of research institutions, and policy makers need a greater understanding of the factors that drive return migration decisions of foreign STEM (science, technology, engineering, and mathematics) doctoral graduates of U.S. universities. To address this need, we conducted a large-scale multi-school revealed-preference survey of job preferences among U.S. STEM PhD students and postdocs from China - the source country of the most foreign doctoral students. The survey presents the respondents with choices of potential job offers, and yields individual-level estimates of each respondent’s indirect utility of a job as a function of location, job status, public versus private nature of the employer, and salary. The estimated preferences imply that Chinese doctoral graduates currently tend to remain in the United States because of a large salary disparity between the two countries rather than because of an inherent preference for locating in the United States. The return rate is quite elastic in the salary gap, and many more graduates will return to China if the gap continues to narrow. We provide return-probability estimates for all possible counterfactual levels of the gap. For example, we find that if the gap narrowed to half of today’s level, the return migration would increase threefold to about 27% of graduates. To counteract this potential reverse brain drain, the U.S. managers and policy makers can provide relatively modest monetary incentives and exploit the heterogeneity in job preferences across different student demographics. We also estimate the additional returns due to potential reduced job availability in desirable U.S. coastal cities and due to greater availability of managerial positions in China, and we find that neither change would increase return migration more than a few percentage points.