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Quotas and Quality: The Effect of H-1B Visa Restrictions on the Pool of Prospective Undergraduate Students from Abroad

In deciding upon whether to pursue an undergraduate education in the United States, a foreign student considers the expected probability of securing US employment after graduation. The H-1B visa provides a primary means of legal employment for college-educated foreign-nationals. In October 2003, the government drastically reduced the number of available H-1B visas, hence lowering a college-educated foreign-born worker’s probability of finding US employment, and possibly discouraging highly qualified international students from attending US colleges and universities. However, citizens from five countries are de facto exempt from the 2003 H-1B visa restrictions. Using students from these five exempt nations as the control group and other international students as the treatment, we study the effects of the 2003 H-1B policy change on the pool of international applicants to US schools. We use two datasets: (i) College Board SAT score data on prospective international applicants; and (ii) SAT and high-school GPA data on international applicants to a single highly-selective university. Our difference-in-difference estimates show that restrictive immigration policy has had an adverse impact on the quality of prospective international applicants, reducing their SAT scores by about 1.5%. This effect is driven mostly by a decline in the number of SAT score reports sent by international students at the top-quintile of the SAT score distribution, suggesting that the restrictive immigration policy disproportionately discourages high-ability international students from pursuing US education. Our results are robust to alternative specifications, including the use of high-school GPA as a measure of applicant ability.

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File URL: http://commons.colgate.edu/cgi/viewcontent.cgi?article=1017&context=econ_facschol
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Paper provided by Department of Economics, Colgate University in its series Working Papers with number 2011-02.

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Date of creation: Jun 2011
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Handle: RePEc:cgt:wpaper:2011-02
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Web page: http://www.colgate.edu/academics/departments-and-programs/economics

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  1. Jennifer Hunt, 2009. "Which Immigrants Are Most Innovative and Entrepreneurial? Distinctions by Entry Visa," NBER Working Papers 14920, National Bureau of Economic Research, Inc.
  2. George J. Borjas, 2009. "Immigration in High-Skill Labor Markets: The Impact of Foreign Students on the Earnings of Doctorates," NBER Chapters, in: Science and Engineering Careers in the United States: An Analysis of Markets and Employment, pages 131-161 National Bureau of Economic Research, Inc.
  3. Mayda, Anna Maria, 2007. "International Migration: A Panel Data Analysis of the Determinants of Bilateral Flows," CEPR Discussion Papers 6289, C.E.P.R. Discussion Papers.
  4. Jacob L. Vigdor & Charles T. Clotfelter, 2003. "Retaking the SAT," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
  5. Mayr Karin & Peri Giovanni, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-52, November.
  6. James Monks & Ronald G. Ehrenberg, 1999. "The Impact of US News and World Report College Rankings on Admission Outcomes and Pricing Decisions at Selective Private Institutions," NBER Working Papers 7227, National Bureau of Economic Research, Inc.
  7. Gauthier-Loiselle, Marjolaine & Hunt, Jennifer, 2009. "How Much Does Immigration Boost Innovation?," CEPR Discussion Papers 7116, C.E.P.R. Discussion Papers.
  8. Chellaraj, Gnanaraj & Maskus, Keith E. & Mattoo, Aaditya, 2005. "The contribution of skilled immigration and international graduate students to U.S. innovation," Policy Research Working Paper Series 3588, The World Bank.
  9. Peri, Giovanni & Sparber, Chad, 2010. "Highly-Educated Immigrants and Native Occupational Choice," Working Papers 2010-09, Department of Economics, Colgate University.
  10. Borjas, George, 2002. "An Evaluation of the Foreign Student Program," Working Paper Series rwp02-026, Harvard University, John F. Kennedy School of Government.
  11. Ximena Clark & Timothy J. Hatton & Jeffrey G. Williamson, 2007. "Explaining U.S. Immigration, 1971-1998," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 359-373, May.
  12. William R. Kerr & William F. Lincoln, 2008. "The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention," Harvard Business School Working Papers 09-005, Harvard Business School.
  13. Barry R. Chiswick, 1999. "Are Immigrants Favorably Self-Selected? An Economic Analysis," University of Chicago - George G. Stigler Center for Study of Economy and State 147, Chicago - Center for Study of Economy and State.
  14. John Bound & Brad Hershbein & Bridget Terry Long, 2009. "Playing the Admissions Game: Student Reactions to Increasing College Competition," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 119-46, Fall.
  15. M. Kathleen Thomas, 2004. "Where College-Bound Students Send Their SAT Scores: Does Race Matter?-super-," Social Science Quarterly, Southwestern Social Science Association, vol. 85(5), pages 1374-1389.
  16. Griffith, Amanda & Rask, Kevin, 2007. "The influence of the US News and World Report collegiate rankings on the matriculation decision of high-ability students: 1995-2004," Economics of Education Review, Elsevier, vol. 26(2), pages 244-255, April.
  17. Richard B. Freeman, 2009. "What Does Global Expansion of Higher Education Mean for the US?," NBER Working Papers 14962, National Bureau of Economic Research, Inc.
  18. Yiu Por Chen, 2005. "Skill-Sorting, Self-Selectivity, and Immigration Policy Regime Change: Two Surveys of Chinese Graduate Students' Intention to Study Abroad," American Economic Review, American Economic Association, vol. 95(2), pages 66-70, May.
  19. Webster, Thomas J., 2001. "A principal component analysis of the U.S. News & World Report tier rankings of colleges and universities," Economics of Education Review, Elsevier, vol. 20(3), pages 235-244, June.
  20. Clark, Ximena & Hatton, Timothy J. & Williamson, Jeffrey G., 2004. "Explaining U.S. immigration, 1971-98," Policy Research Working Paper Series 3252, The World Bank.
  21. Sharon G. Levin & Grant C. Black & Anne E. Winkler & Paula E. Stephan, 2004. "Differential Employment Patterns for Citizens and Non-Citizens in Science and Engineering in the United States: Minting and Competitive Effects," Growth and Change, Wiley Blackwell, vol. 35(4), pages 456-475.
  22. Geiser, Saul & Maria Veronica Santelices, 2007. "Validity Of High-School Grades In Predicting Student Success Beyond The Freshman Year: High-School Record vs. Standardized Tests as Indicators of Four-Year College Outcomes," University of California at Berkeley, Center for Studies in Higher Education qt7306z0zf, Center for Studies in Higher Education, UC Berkeley.
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