Labor Market Openness, H‐1b Visa Policy, and the Scale of International Student Enrollment in the United States

18 Pages Posted: 27 Nov 2015

See all articles by Kevin Shih

Kevin Shih

Rensselaer Polytechnic Institute (RPI) - Department of Economics

Date Written: January 2016

Abstract

International students have long comprised an important part of U.S. higher education. However, little is known regarding the factors that encourage students from across the world to enroll in U.S. colleges and universities each year. This paper examines the relationship between international enrollment and the openness of the United States' skilled labor market, currently regulated by the H‐1B program. Gravity regressions reveal that H‐1B visa issuances to a country are positively and significantly related to the number of international students from that country. Causal estimates of the impact of labor market openness are achieved by exploiting a dramatic fall in the H‐1B visa cap in October 2003. Triple difference estimates show that the fall in the cap lowered foreign enrollment by 10%.

JEL Classification: F22, I21, J11

Suggested Citation

Shih, Kevin, Labor Market Openness, H‐1b Visa Policy, and the Scale of International Student Enrollment in the United States (January 2016). Economic Inquiry, Vol. 54, Issue 1, pp. 121-138, 2016. Available at SSRN: https://ssrn.com/abstract=2695917 or http://dx.doi.org/10.1111/ecin.12250

Kevin Shih (Contact Author)

Rensselaer Polytechnic Institute (RPI) - Department of Economics ( email )

110 8th Street
Troy, NY 12180
United States

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