High-skilled labors are key inputs to accelerate the long-run growth rate of a country’s economy and research production. In today’s increasingly globalized economy, attracting, growing and retaining high-skilled immigrants have been and will continue to play a significant role in maintaining a country’s leading economic advantages on the global stage. Traditionally, the United States is the largest and most important host of highly-educated foreign students. Given that the high-skilled immigrants can generate both costs and benefits on many aspects in the U.S., to explore the impacts of the high-skilled immigrants is of great policy interest. The two papers in my dissertation, therefore, address the influence of high-skilled immigrants on U.S. undergraduate programs and graduate programs, respectively.
The first chapter examines the impacts of the dramatic increase in new foreign undergraduate students over the past decade on the U.S. higher education sector. I use exogenous factors driving a large inflow of Chinese students that began in 2006, in combination with variation in historical levels of foreign students to construct an instrument to predict enrollment patterns. Using a two-stage least square model that is identified with a difference-in-differences specification, I find a significant crowd-out effect of the enrollment of foreign undergraduate students on the enrollment of domestic undergraduate students at large selective American research universities, with a magnitude approximately one-for-one. Constraints in universities’ demand for students appear to explain the crowd-out effect. I also find that admitting more foreign undergraduate students increases non-discounted tuition, and that the economic gains of enrolling foreign undergraduate students allow American universities to increase institutional grant aid.
The second chapter uses the opening up of China in 1978 to estimate the causal effect of this flow on the productivity of their professors in mathematics departments across the United States. Our identification strategy relies on both the suddenness of the opening of China and on a key feature of scientific production: intra-ethnic collaboration. The new Chinese students were more likely to be mentored by American professors with Chinese heritage. The increased access that the Chinese-American advisors had to a new pool of considerable talent led to a substantial increase in their productivity. Despite these sizable intra-ethnic knowledge spillovers, comparable non-Chinese advisors experienced a decline in the number of students they mentored and a concurrent decline in their research productivity. In fact, the productivity gains accruing to Chinese-American advisors were almost exactly offset by the losses suffered by the non-Chinese advisors. Finally, the evidence does not support the conjecture that the efficiency gains from the supply shock will be more evident in the next generation, as the Chinese students begin to contribute to mathematical knowledge. The rate of publication and the quality of the output of the Chinese students is comparable to that of the American students in their cohort.