In January 2022 the Department of Homeland Security announced the amendment of the list science, technology, engineering, and math degree programs by adding 22 qualified fields of study to the F-1 visa program. The amendment allows qualified international students to apply for a 24-month extension of their Optional Practical Training beyond the already existing 12-month period.
This decision renewed the discussion about the impact of the migration of high-skilled workers (and especially recent graduates) on the economy of host and sending countries. The evidence reveals that existing policy gaps and bureaucratic procedures hinder both parties’ ability to maximize potential benefits from work-force mobility.
Opening Job Markets for International Students – Widely Accepted Approach
The United States is not alone in attempting to boost the recruitment of high-skilled international students. Over the last few years many leading countries worldwide have tried to soften restrictions for international graduates to integrate in the local labor market. For example, in 2016 the Netherlands gave international students an extended period of three years to apply for jobs after their graduation.
More recently, the United Kingdom and Finland made it easier for international students to join their labor markets. The UK has announced that recent graduates of the world’s leading universities will be allowed to apply for a visa to work in the UK for three years, even without already having a job position. Finland extended the period of searching for job for international students from one to two years.
The list is not comprehensive, and policies applied by different countries vary broadly. Nevertheless, the goal in each case is the same – maximize benefits from the mobility of high-skilled workers.
Can Host Countries Benefit from International Students and Graduates?
One of the largest direct positive economic impacts that international students can bring for a host country economy is a monetary contribution by paying tuition fees. For example, during 2018-2019 academic year the contribution from international students to U.S. Economy was 41 billion USD (NAFSA, 2020). Moreover, immigrant students contribute to the total consumer spending, which itself drives economic growth and can contribute in providing more job opportunities in the long run.
Some opponents of softened polices argue that countries should not make it easier for international students to work in host countries, because increased flow of migrant workers compete with domestic workers and put them at a disadvantage. However, statistics prove the opposite. Immigration can reduce labor force shortage and fill critical skill gaps; it can also improve labor market productivity and lead to increased average wages for all workers. (Business Roundtable, 2018)
Another motivation for the countries to allow international students to integrate into the domestic labor market is to improve their global competitiveness – instead of letting foreign competitors to hire the students they educated, countries prefer to use this knowledge to boost their own businesses and competitiveness in global economy.
Increased foreign employment opportunities have a positive impact on the sending country as well. Even though not all students will be admitted in foreign universities, the potential opportunity of getting there increases the motivation of domestic students to get a better education, which itself fosters economic growth of the county in the long run (Chevalier, 2022). Moreover, the statistics reveal that 65 to 80 percent of international students tend to return to their home country bringing back their international experience (NAFSA, 2020). Exchanging these multilateral experiences supports convergence of the countries.
Policy Gaps Hinder the Generation of Higher Benefits
Despite supportive policies and the benefits generated from allowing more high-skilled migrants, countries cannot always attract the best and brightest students to remain after graduation.
International recent graduates often face discrimination in the labor market due to the non-recognition of foreign credentials. Employers usually doubt the students’ previous professional experience and tend to offer them lower salaries. This is usually driven by the mismatch of required qualifications across the countries (Weinar, 2020).
Sometimes complicated visa policies make it challenging (or even impossible) for students to remain in the host countries. In such cases they prefer to either return to their home country or enter another country’s labor market.
Moreover, existing annual caps on issuing working visas limits the ability to hire foreign young professionals. For example, the current annual cap on H-1B visas is 65,000 in addition to 20,000 visas for foreign professionals who graduated with a master’s or doctorate degrees from U.S. universities. This cap leaves many professionals who can contribute in the competitiveness of the United States economy beyond the U.S. labor market.
A Way Forward
The evidence suggests that there are several policy responses that can support amplifying the positive impact of the high-skilled workers’ mobility. Open-visa policies from host countries and openness on mobility from home countries increase motivation for students to invest more in education and have higher contribution in the economy. Moreover, Mutual Recognition Agreements (MRA) are recognized as a useful tool for smooth transition from origin to destination labor market (Chevalier, 2022). MRAs set rules for the recognition of credentials for the individuals who obtained their qualifications in signatory countries.
Students’ decisions to migrate for education depend highly on potential job market opportunities in the international market (together with the quality of education). Making international labor markets more accessible and less discriminatory for these students can increase their motivation to remain and contribute to fostering economic growth of host countries.
Business Roundtable. (2018). The Economic Impact of Curbing the Optional Practical Training Program. Washington D.C.: Business Roundtable.
Chevalier, A. (2022). How to Attract International Students? IZA World of Labor.
NAFSA. (2020). An Economic and Foreign Policy Risks America Cannot Ignore. Washington D.C.: National Association for Foreign Student Affairs.
Weinar, A. K. (2020). The State and the Highly Skilled Immigrant. In A. K. Weinar, Highly-Skilled Migration: Between Settlement and Mobility. (p. 37-77). IMISCOE Research Series.