The Globalization of Postsecondary Education: The Role of International Students in the US Higher Education System

John Bound, Breno Braga, Gaurav Khanna, Sarah Turner
Date of Publication: 
January, 2021
Source Organization: 

University learning has facilitated the flow of individuals and knowledge across national borders for centuries, but the recent scale of student flows and the magnitude of tuition revenues from foreign students across the globe is unprecedented. The number of students pursuing higher education degrees outside their home countries more than doubled between 2000 and 2017 to reach 5.3 million (UNESCO 2018).

For the United States, which has a large number of colleges and universities and a disproportionate share of the most highly ranked colleges and universities in the world, total enrollment of foreign students more than tripled between 1980 and 2017, from 305,000 to over one million students in 2017 (National Center for Enrollment Statistics 2018). This rising population of students from abroad has made higher education a major export sector of the US economy, generating $44 billion in export revenue in 2019, with educational exports being about as big as the total exports of soybeans, corn, and textile supplies combined (Bureau of Economic Analysis 2020). 

Traditionally, talented undergraduate and graduate students from abroad have engaged with educational opportunities that exist in the United States at a time when their home countries often had more limited high-quality university options. In addition, for students, especially those in fields related to science, technology, engineering, and mathematics, time spent studying in the United States has facilitated access to job opportunities, with the US visa system structured to encourage this behavior. Unlike work visas, student visas are not subject to a cap and constitute an important pathway for the foreign-born to enter the US labor market(Rosenzweig 2006; Bound et al. 2014). The participation of students from abroad in US higher education affects the global production of skills and ultimately alters the allocation of university-educated workers to labor markets in the United States and abroad. On the supply side of higher education, US colleges and universities saw the opportunity to recruit talented students and, in some cases, to generate revenue. We begin with an overview of the basic evidence of student flows to US colleges and universities by degree level and type of institution and the visa policies which mediate these flows. We examine how factors driving the demand for higher education—reflecting socioeconomic and demographic change abroad, and supply-side factors, reflecting the behavior of US colleges and universities—impact these flows. Finally, we explore the potential consequences of reductions in foreign student flows for talent development and labor markets in the United States and abroad.

Even before the COVID-19 pandemic and accompanying recession, there was evidence that enrollment of foreign students in US higher education was slowing dramatically, driven by some combination of improved educational and employment opportunities in home countries and other non-US destinations as well as perceptions of rising US hostility to immigrants. Given the formidable levels of tuition revenue generated by foreign students, especially at the undergraduate and master’s levels, any reduction in the flow of foreign students would have a direct and negative impact on universityresources that would not be easily offset by other sources of support. While reductions in the flow of foreign students at the doctorate level would not lead to declines in tuition revenues—given that PhD students usually receive financial support fromuniversities—disruptions in academic research are likely to follow, which would likely not be offset in full by growth in doctorate study among domestic students.

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Bound, J., Breno Braga, B., Khanna, G. & Turner, S. (Winter 2021). The Globalization of Postsecondary Education: The Role of International Students in the US Higher Education System. Journal of Economic Perspectives.