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

  • Kato, Takao

    ()

    (Colgate University)

  • Sparber, Chad

    ()

    (Colgate University)

In deliberating whether to pursue an undergraduate education in the US, a foreign student takes into consideration 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 the probability of a college-educated foreign-national finding 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 international students from these five exempt nations as the control and other international students as the treatment group, 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 fixed effect estimates show that the 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 attending US schools. Our results are robust to alternative specifications, including the use of high-school GPA as a measure of applicant ability.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4951.

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Length: 40 pages
Date of creation: May 2010
Date of revision:
Publication status: published in: Review of Economics and Statistics, 2013, 95 (1), 109-126
Handle: RePEc:iza:izadps:dp4951
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  1. Karin Mayr & Giovanni Peri, 2009. "Brain drain and Brain Return: Theory and Application to Eastern-Western Europe," Vienna Economics Papers 0907, University of Vienna, Department of Economics.
  2. Peri, Giovanni & Sparber, Chad, 2010. "Highly-Educated Immigrants and Native Occupational Choice," Working Papers 2010-09, Department of Economics, Colgate University.
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  6. 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.
  7. Hunt, Jennifer, 2010. "Which Immigrants Are Most Innovative and Entrepreneurial: Distinctions by Entry Visa," CEPR Discussion Papers 7699, C.E.P.R. Discussion Papers.
  8. Jacob L. Vigdor & Charles T. Clotfelter, 2003. "Retaking the SAT," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
  9. William Kerr & William Lincoln, 2010. "The Supply Side of Innovation: H-1B Visa Reforms and US Ethnic Invention," William Davidson Institute Working Papers Series wp978, William Davidson Institute at the University of Michigan.
  10. 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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  12. 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.
  13. 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.
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  16. 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.
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