Working Paper: CEPR ID: DP7709
Authors: Eric T. Stuen; Ahmed Mushfiq Mobarak; Keith Maskus
Abstract: We study the contribution of foreign science and engineering talent to the creation of new knowledge in the U.S. economy using panel data on 2300 science and engineering (S&E) departments at 100 large American universities from 1973 to 1998. We use macroeconomic shocks and policy changes in source countries that differentially affect enrollments across fields and universities to isolate exogenous variation in the supply of students at specific departments. Both foreign and domestic graduate students are central inputs into knowledge creation, and the marginal foreign student contributes more to the production of scientific publications and citations. A 10% decrease in the foreign share of doctoral students lowers S&E research output at U.S. universities by 5-6%. A theoretical model of university admissions and scholarships helps us infer the productivity effects of student quality, and econometric results indicate that any visa restrictions limiting entry of high-quality foreign students is most costly for U.S. innovation. Increased diversity appears to be the primary mechanism by which foreign students improve research outcomes. The impact of more restrictive immigration policies depends on how they affect the quality margin and diversity of incoming foreigners.
Keywords: foreign graduate students; high-skilled immigration; immigration; innovation; visa policy
JEL Codes: 015; 031; P33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Quality of incoming foreign students (I23) | Research productivity (O47) |
| Visa restrictions limiting entry of high-quality foreign students (F22) | US innovation (O39) |
| Foreign doctoral students (Y40) | Scientific publications (A29) |
| Foreign doctoral students (Y40) | Citations (A14) |
| 10% decrease in the foreign share of doctoral students (F29) | 56% reduction in SE research output (A14) |