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 They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
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.
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