Trade Liberalization and Chinese Students in US Higher Education

87 Pages Posted: 29 May 2020 Last revised: 29 Jul 2022

See all articles by Gaurav Khanna

Gaurav Khanna

University of California, San Diego (UCSD)

Kevin Shih

Department of Economics, Rensselaer Polytechnic Institute

Ariel Weinberger

George Washington University - Department of International Business

Mingzhi Xu

INSE at Peking University

Miaojie Yu

Peking University - China Center for Economic Research (CCER)

Date Written: November 29, 2021

Abstract

We investigate whether trade liberalization encourages Chinese student enrollment in US universities. We focus on China's accession to the World Trade Organization and show that Chinese cities more exposed to this trade liberalization episode sent more students to US universities. Results indicate that growth in housing income/wealth was an important channel that allowed many Chinese families to afford US tuition, consistent with large growth in the share of Chinese students that finance their studies primarily using personal funds. Other potential mechanisms, such as changing returns to education or information flows, appear to play less of a role. We also inform distributional consequences for the US. Trade liberalization induced increases in the share of Chinese students studying non-STEM fields, at the Bachelors level, and also at less-selective US universities. Student inflows were similar in both low and high human capital areas in the US, indicating that educational exports do not exacerbate regional inequality. An important conclusion of our work is that the trade deficit in goods partially cycles back as a surplus in education exports to China.

Keywords: International Students, Trade Liberalization, China, Migration

JEL Classification: F16, I25, J24, J61

Suggested Citation

Khanna, Gaurav and Shih, Kevin and Weinberger, Ariel and Xu, Mingzhi and Yu, Miaojie, Trade Liberalization and Chinese Students in US Higher Education (November 29, 2021). Available at SSRN: https://ssrn.com/abstract=3590272 or http://dx.doi.org/10.2139/ssrn.3590272

Gaurav Khanna

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

HOME PAGE: http://www.econgaurav.com

Kevin Shih

Department of Economics, Rensselaer Polytechnic Institute ( email )

110 8th Street
Troy, NY 12180
United States

Ariel Weinberger (Contact Author)

George Washington University - Department of International Business ( email )

2023 G Street NW
Washington, DC 20052
United States

Mingzhi Xu

INSE at Peking University ( email )

Peking University
China
Beijing, Beijing 100871
China

Miaojie Yu

Peking University - China Center for Economic Research (CCER) ( email )

Beijing, Beijing 100871
China
+86-10-6275-3109 (Phone)

HOME PAGE: http://mjyu.ccer.edu.cn

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