The Effects of the OPT Visa Extension Rule on STEM Business Programs in the U.S.

Abstract

I investigate the effects of STEM Optional Practical Training (OPT) visa extension rule on Science, Technology, Engineering, and Mathematics (STEM) program offerings and student degree attainment. The extension rule enables international students with STEM degrees to apply for a 17-month extension of the OPT period to work in the United States. Compared to studies on student choices, little is known about supply side responses to immigration policies. I use U.S. universities’ major code level data from 2006-2018 and exploit a business major code designated as a STEM major in May 2012. Using a difference-in-differences model, I find that the OPT extension rule increases the probability of offering STEM-designated business programs by 4 percentage points (16.2%) at the bachelor's level and 12.2 percentage points (90.3%) at the master's level. Event-study estimates show that the probability of offering STEM business programs increases by 5.5 to 25.5 percentage points one to five years after the visa policy change at the master’s level. In addition, the extension of the OPT period increases the number of degrees awarded to international students by 62.2% at the master’s level in STEM business majors.

Keywords: immigration, international students, higher education, Optional Practical Training

JEL Classification: J61, I21