We present and calibrate a dynamic model that characterizes the labor market for computer scientists. In our model, firms can recruit computer scientists from recently graduated college students, from STEM workers working in other occupations or from a pool of foreign talent. Counterfactual simulations suggest that wages for computer scientists would have been 2.8–3.8% higher, and the number of Americans employed as computers scientists would have been 7.0–13.6% higher in 2004 if firms could not hire more foreigners than they could in 1994. In contrast, total CS employment would have been 3.8–9.0% lower, and consequently output smaller.

The number of international undergraduate students at US public research universities increased dramatically over the past two decades, alongside concurrent reductions in state support for universities. We show that these trends are closely connected as public research universities relied on foreign students to cushion the effects of falling appropriations. The growing capacity in emerging economies to pay for a US education provided opportunities for universities to recover revenues from full-fare-paying foreign students. We estimate that between 1996 and 2012, a 10 percent reduction in state appropriations led to an increase in foreign enrollment of 16 percent at public research universities. (JEL H75, I22, I23)

and the NBER Spring Meetings on Education for helpful comments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w22981.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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In the four decades since 1980, US colleges and universities have seen the number of students from abroad quadruple. This rise in enrollment and degree attainment affects the global supply of highly educated workers, the flow of talent to the US labor market, and the financing of US higher education. Yet, the impacts are far from uniform, with significant differences evident by level of study and type of institution. The determinants of foreign flows to US colleges and universities reflect both changes in student demand from abroad and the variation in market circumstances of colleges and universities, with visa policies serving a mediating role. The consequences of these market mechanisms impact global talent development, the resources of colleges and universities, and labor markets in the United States and countries sending students.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Executive SummaryThe rising importance of information technology (IT) occupations in the US economy has been accompanied by an expansion in the representation of high-skill, foreign-born IT workers. To illustrate, the share of the foreign born in IT occupations increased from about 15.5% to about 31.5% between 1993 and 2010, with this increased representation particularly marked among those younger than 45. This analysis focuses on understanding the role that US higher education and immigration policy plays in this transformation. A degree from a US college/ university is an important pathway to participation in the US IT labor market, and the foreign born who obtain US degree credentials are particularly likely to remain in the United States. Many workers from abroad, including countries like India and China where wages in IT fields lag those in the United States, receive a substantial return to finding employment in the United States, even as temporary work visa policies may limit their entry. Limits on temporary work visas, which are particularly binding for those educated abroad, likely increase the attractiveness of degree attainment from US colleges and universities as a pathway to explore opportunities in the US labor market in IT.

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