The Impact of International Students on US Colleges: Higher Education as a Service Export
40 Pages Posted: 4 Jun 2021
Date Written: June 2021
Abstract
Between 2005 and 2016, international enrollment in US higher education nearly doubled. I examine how trade shocks in education affect public universities' decision-making. I construct a shift-share instrument to exploit institutions' historical networks with different origins of international students, income growth, and exchange-rate fluctuations. Contrary to claims that US-born students are crowded out, I find that international students increase schools' funding via tuition payments, which leads to increased in-state enrollment and lower tuition prices. Schools also keep steady per-student spending and recruit more students with high math scores. Lastly, states allocate more appropriations to universities that attract fewer international students.
Keywords: Higher education, international student, university objective, service trade, education export
JEL Classification: I21, I23, F14, F22, J61
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