According to FWD.us estimates, 100,000 international student graduates
of U.S. colleges and universities each year would like to stay and work permanently in the U.S.
They could add up to $233 billion to the U.S. economy this decade and
reduce STEM-related talent shortages by about a quarter.
February 3rd, 2022
The United States could increase its competitiveness in the global race for talent with a straightforward process for the 100,000 international students projected to graduate from U.S. colleges and universities each year who want to stay and work permanently in the country. According to FWD.us estimates, allowing such graduates to work permanently in the U.S. could add up to $233 billion in wages to the U.S. economy this decade, including $65 billion in combined federal, state, and local taxes. Such a policy could also reduce our STEM-related talent shortages by a quarter this decade. Congress should immediately introduce legislation allowing international students a direct avenue to permanent residency after their graduation.
For decades, the U.S. has been the global leader in higher education and the top destination for international students from around the world. The U.S. offers both superior educational opportunities and an attractive, supportive environment for international students. Consequently, the U.S. saw the number of new international students grow throughout much of the previous decade, bolstering this incredible competitive advantage in recruiting global talent.
But this competitive edge has started to dull as other countries ramp up their efforts to recruit prospective students. For the first time in many years, the total number of international students in the U.S. decreased in 2019, and continued decreasing even further after the start of the COVID-19 pandemic. The U.S. hosts more international students than any other country in the world. But 50% more international students study in Australia, Canada, and the U.K. combined than in the U.S., much higher than in 2015 when about the same number studied in the U.S. as in these three countries.
Declining international student enrollment clearly indicates the U.S. is losing its attractiveness, and our immigration policy is a critical contributing factor. A new survey commissioned by FWD.us of prospective international students suggests the problem will only get worse in the years ahead. Students choosing to study in other countries are often motivated by the ability to stay in that country after graduating, suggesting that those nations’ immigration policies are a strong attractor. For example, majorities of students who are likely to study in Canada (64%) and Australia (52%), say a straightforward process to live permanently in the country after graduation is important when selecting their country of study. By contrast, this number is a minority (47%) for students likely to study in the U.S., suggesting that the U.S. is ignoring a critical factor to attract prospective students.
While other countries promising accessible opportunities to stay and work have seen their recruitment efforts surge, the lack of a straightforward path for international student graduates to stay permanently and eventually acquire U.S. citizenship has been forcing the U.S. to lose out on recruiting top talent.1
America will feel the consequences of losing the global race for talent as much at home as on the global stage. Talent shortages for STEM-related jobs, for example, persist in the U.S., even as we enter a postpandemic economy. Today, the U.S. has 3 million job vacancies in professional/business service and healthcare/social assistance industries, up from about one million vacancies in 2010.2
STEM industries facing dire shortages include occupations such as physicians, computer engineers, scientists, and mathematicians—jobs that are critical to fill for the U.S. to meet emerging healthcare needs for an aging population, grow our global competitive advantage, deliver needed advancements in science and technology, and respond to ever-changing national security needs. These industries have largely maintained a 5% or higher rate of job openings during the past decade, even during and after the pandemic.
While these industries are searching desperately for more workers, thousands of international students educated in the U.S. and trained in these important fields return to their home countries each year, a major loss to the U.S. economy. For example, some 16% of all graduates from STEM-related fields are international students, including nearly half of STEM master’s (48%) and PhD (45%) graduates. These professionals, if they could remain permanently in the U.S., could contribute greatly to the U.S. economy. Failing to create a mechanism for retaining talented international students educated in the U.S. results in a self-imposed disadvantage for the United States.3
Despite these challenges, the U.S. continues to attract top talent, and the missed opportunities of the past decade can still be turned around. Using government data and a recent international survey of prospective international students, FWD.us estimates that, on average over the next decade, as many as 100,000 international student graduates each year— including 66,000 in business management, health, and STEM-related fields—would like to stay and work in the U.S. for the long term if a straightforward process for permanent residency were available to them. Such a policy, if enacted by Congress, could reduce shortages in business management, health, and STEM-related jobs by a quarter this decade.
Because our immigration system has not seen substantial updates in decades, international graduates rely upon Optional Practical Training (OPT), an extension of their student status to allow them to stay and work in the U.S. in their field of study for one year, plus an additional two years for individuals with STEM degrees. The number of international students staying and working in the U.S. extension program has increased dramatically in recent years. If international student graduates wish to continue working in the U.S. beyond their time on OPT, an employer likely attempts to obtain them a specialty occupation visa, such as an H-1B visa.
For more information on current and recommended policies for international student graduates accessing permanent residency in the U.S., see our policy blog.
However, specialty occupation visas and employment-based green cards have numerical limits that are significantly smaller than the number of graduates being sponsored by American employers. And complicated prioritization limits squeeze out many international student graduates from working permanently in the United States. These caps, among other immigration policies, have created an arduous process for international students who want to stay in the U.S., creating bottlenecks at multiple points along the path. Because of these challenges, many international students return home soon after completing their studies, rather than putting their talents to work here.
FWD.us estimates that the economy could expand by up to $233 billion over the next decade through these graduates’ economic contributions if graduates could work permanently in the U.S. The U.S. could experience an even larger economic impact when some of these graduates start businesses in the U.S. About 2 in 5 Fortune 500 companies, for example, were started by immigrants or children of immigrants. And, each immigrant with an advanced degree, on average, adds even more jobs to the economy. Consequently, granting international student graduates a pathway to permanently remain in the U.S. and eventually obtain U.S. citizenship could reap even greater economic dividends than their own wages.
The Biden Administration has developed an action plan to strengthen international education, including increasing the recruitment and retention of international students, and has made some initial changes such as adding more STEM categories for graduates applying for a temporary visa. At the same time, however, the administration has been slow to act, compounded by lengthy immigration processing delays at United States Citizenship and Immigration Services (USCIS).
Some opportunities for international graduates can be expanded by executive action, but Congress still needs to act. Congress should immediately introduce legislation allowing international students a clear avenue to permanent residency after their graduation. This would benefit the U.S. economically as we compete with other nations for highly skilled talent, and grow our economy through increased immigration.
International students need to know that, if they successfully complete their study in the U.S., they are not only welcomed, but actively encouraged, to put their education, training, and skills to work here in the United States. It’s a smart policy for international students. It’s an even smarter policy for America.
Andrew Moriarty, Kate Hansen
PUBLIC OPINION RESEARCH SUPPORT
QS Quacquarelli Symonds
EXTERNAL REVIEW SUPPORT
David J. Bier, Cato Institute
This report brings together estimates, survey results, and projections based on three types of data: (1) international student administrative data, (2) international student survey data, and (3) labor force and economic data.
INTERNATIONAL STUDENT ADMINISTRATIVE DATA
Total international student enrollment figures in the U.S. are based on annual reporting by Open Doors. Student enrollment for other countries was gathered from Project Atlas (2012 to 2019) and OECD (2010 to 2011). Origin country distributions in 2019 from these data were used for weighting international survey data (see below). These figures serve as the total population of international students, or total stock, for a particular school year. Years are the start of school years in each country, usually September for Canada, the U.K., and the U.S., and March for Australia.
Projections of new international students entering the U.S., or annual inflows, allowed for a sharp, one-year increase from 2020 to 2021 due to deferrals of international students as a result of the COVID-19 pandemic, based on findings from the Open Doors 2020 Fall snapshot survey. New student enrollment projections for 2022 through 2027 follow the average annual growth trend in new international students from 2010 to 2015, the last extended period of growth in international students after the U.S. economic recession in 2007 to 2009.4 This growth assumption in the number of new international students each year results in about 340,000 new undergraduate and graduate international students in 2027, about 100,000 more than new student enrollment in recent years.5 Projections of new international students were estimated separately for undergraduate- and graduate-degree levels. Projected breakdown by field (STEM-related, business management, and healthcare as a single group versus all other fields) was based on the field breakdown for all enrolled students in 2020.
FWD.us then estimated the number of international student graduates by their degree program and field of study within the projection period (2021-2022 to 2030-2031 school years). With the projected number of new international students entering undergraduate programs (four-year programs) and graduate programs (also assumed to be an average of four years in duration) for future years, the total number of projected graduates each year for 2021-2022 to 2030-2031 school years was estimated. These projected, annual international student graduate estimates were used as a base population in estimating the average annual number of graduates over the decade who desire to stay and work permanently each year based on our survey data (see international student survey data below).
INTERNATIONAL STUDENT SURVEY DATA
FWD.us commissioned survey questions in QS Quacquarelli Symonds’s annual international student survey of prospective international students worldwide, the world’s broadest and largest survey of prospective international students. Survey respondents were recruited via a network of participating higher education institutions in the U.S. and other English-speaking universities around the world. The survey was conducted January through March 2021. More than 34,000 prospective international students to the U.S. responded to the survey. In all, nearly 84,000 prospective students for all countries completed the survey. Survey data were weighted by total enrollment origins for each country of study to make the survey more representative of the prospective international student population.6
FWD.us questions in the survey examined, among other items, the desire and length of time prospective students would like to stay in the U.S. after graduation. Shares of those desiring to stay for different lengths of time were applied to average annual projected number of international student graduates between the 2021-2022 and 2030-2031 school years (as calculated in the description above), by degree program (undergraduate, graduate) and by academic field (professional/business service and healthcare/social assistance subject areas versus all other subjects).
These estimates allowed for an average annual number of international student graduates over the decade who would like to stay and work permanently in the U.S., defined here as four years or longer, if a legal avenue were easily accessible to them.7
LABOR FORCE AND ECONOMIC DATA
Bureau of Labor Statistics data were used for job opening statistics, with specific attention to industries having a large share of highly skilled jobs, such as professional/business service and healthcare/social assistance industries.8 These industries had a persistent annual job opening rate of 5% or greater between 2017 and 2021. The average, seasonally adjusted, monthly job opening rate between 2017 and 2021 in these industries was applied to total positions in the same fields projected by the Bureau of Labor Statistics number of jobs in these industries in 2030. Data were accessed in October 2021.
Economic contributions for student graduates in this decade (2022 to 2030) were based on 2019 income data from American Community Survey (ACS). Undergraduate-degree graduates less than 25 years old employed in professional/business service and healthcare/social assistance industries were randomly selected, as were the same age group with an undergraduate education working in all other fields. Population targets for this random assignment were based on the average annual number of projected undergraduate degree program graduates from STEM-related (33,000) and other fields (17,000) who would like to stay in the U.S. four years or longer over the coming decade. Similarly graduate-degree graduates less than 30 years old employed in professional/business service and healthcare/social assistance industries were also randomly selected, as were the same age group with a graduate education working in all other fields. Population targets for this random assignment is based on the average annual number of projected undergraduate degree program graduates from STEM-related (33,000) and other fields (17,000) who would like to stay in the U.S. four years or longer over the coming decade (see earlier descriptions).
Economic gains for the decade were based on the total income between 2022 and 2030 before taxes for all graduating cohorts. Each graduating cohort’s wages were increased by 3% each year.9 Federal and payroll taxes were based on tax estimates for market income by household type and household size from the Congressional Budget Office’s 2017 “Distribution of Household Income” report. State and local taxes were based on estimated state averages of taxation by income from the Institute of Taxation and Economic Policy’s 2018 report “Who Pays? A Distribution Analysis of the Tax Systems in All 50 States.”
These national-level economic data were disaggregated by state, according to the state distribution during the random selection step. This permits projected state economic gains for an international student graduate permanent visa. The same tax structures were applied to these projected economic gains by state.
The U.S. is the world’s top destination for international students, with nearly 1.1 million international students in 2019 before the start of the COVID-19 pandemic.10 But the growth in the total number of international students has slowed in recent years, meaning fewer new international students are choosing to bring their talents to the U.S. In fact, the total number of international students in the U.S. decreased in 2019, the first time since the 2001-2002 academic year.11
Note: Rounded to thousands.
Source: International Institute of Education’s (IIE) Project Atlas (2012-2019), Organization for Economic Co-operation and Development (OECD) estimates for 2010 and 2011
At the same time, other English-speaking countries seeking to attract international students have seen their enrollments increase. The number of international students in Canada, for example, has more than doubled since 2010, and increased 16% alone between 2018 and 2019. Australia has also seen a similar doubling of students during the past decade. Meanwhile, international student enrollment in the U.K. plateaued for several years, but jumped by 12% between 2018 and 2019.12 In 2019, about 50% more international students studied in Australia, Canada, and the U.K. combined than in the U.S. By comparison, in 2015, about the same number of international students studied in these three countries combined as in the U.S.
Several factors influence which country international students choose. For example, FWD.us analysis of a recent survey of prospective international students shows that majorities of prospective international students planning on attending a university in Australia (54%), Canada (51%), the U.K. (61%), or the U.S. (61%) base their decision on the quality of postsecondary teaching in the country. They also highly rate whether the country welcomes international students, with majorities of students likely to study in these countries—Australia (55%), Canada (55%), the U.K. (54%) and the U.S. (55%)—all saying it is an important factor in their decision. Scoring relatively high on these factors, the U.S. continues to be somewhat competitive in the global talent race for international students. This is to our competitive advantage.
However, the third highly ranked factor for country selection is the importance of a straightforward process to be able to live permanently in the country of study after graduation. The United States’ poor performance in this category is a missed opportunity and could be a factor driving the decline in new enrollments. FWD.us’ survey results show that a minority (47%) of future international students likely to study in the U.S. find this issue to be extremely important or very important when deciding their country of study.
Note: Survey question: “When selecting a country to study in, how important is a straightforward process to live permanently in the country following graduation?”
Source: FWD.us 2021 survey of prospective international students likely to study in listed countries, as part of QS Quacquarelli Symonds’s annual international student survey. See Methodology for details.
By comparison, however, majorities of students who are likely to study in Canada (64%) and Australia (52%), countries with more accessible paths to permanent residency for graduates, also say permanent residency options are important, possibly indicating a factor that is attractive to prospective international students in these countries that is less available in the United States. This is to the U.S.’ competitive disadvantage, likely reflecting the fact that competing countries have more accessible paths for permanent residency.
Our failed immigration system has made the U.S. a less-desirable destination for international students, with other countries picking up talent that could have chosen to study in the United States.
There is an opportunity for Congress to make a bold move to address the disadvantage and change this trend: give international students a clear, legal avenue to become permanent residents, leading to U.S. citizenship. Shoring up a critical deficit in the U.S. attractiveness to prospective students could increase international student enrollment, strengthening a long-term pipeline of individuals to meet highly skilled labor demands in the U.S.
Job vacancies in STEM, health, and business management fields have nearly tripled over the previous decade. And, based on current trends, job vacancies in these fields will remain high in the years ahead, numbering an estimated 2.5 million job vacancies in these industries in 2030 if current job trends and our restrictive immigration policies continue.
Note: Jobs in professional, scientific, and technical services include accounting, architecture, computer systems, scientific research, and consulting. Healthcare/social assistance jobs include physicians, nurses, medical scientists, and social/community health managers.
Source: FWD.us analysis of Bureau of Labor Statistics, October 2021
There is simply an insufficient number of native-born graduates to fill all these highly skilled jobs. These labor shortages have persisted, largely unchanged, throughout the COVID-19 pandemic. Consequently, U.S. companies need access to a larger pool of potential job candidates.
Fortunately, international students who are already living here, who have been educated at U.S. higher education institutions, and who often have hands-on experience working for U.S. companies, can help grow this talent pool on the very campuses where many U.S. businesses already prioritize their recruitment.
Increasing immigration in this way supports the U.S.’ economic and national security interests. In fact, attracting and retaining international students is an important tool the U.S. should use to expand research and advance science and technology, and to bolster the healthcare workforce needed to support our aging population.
By welcoming international students with education and training to fill critical roles in these fields, the U.S. can reverse this trend and turn a shortage into an advantage. FWD.us estimates that labor shortages for business management, health, and STEM-related positions could be reduced by a quarter over this decade if our immigration system put in place a commonsense process for international student graduates wanting to fill these empty roles. This can be done by creating a straightforward avenue for permanent residency that leads to U.S. citizenship.
A majority (73%) of prospective international students to the U.S. in 2021 say they would stay in the U.S. to live and work if they were graduating from their degree program today and a visa were easily accessible to them. Nearly 4 in 10 (38%) prospective students say they would like to live in the U.S. for four years or longer after graduation, longer than the OPT program, the main postgraduate work program, currently permits.
Note: Survey question: “If you were graduating from your intended degree program today, would you seek a visa to stay and work within the U.S. if a visa was easily accessible to you?” Among those saying yes, “How long would you ideally like to live and work in the U.S. following graduation?”
Source: FWD.us 2021 survey of prospective international students to the U.S., as part of QS Quacquarelli Symonds’s annual international student survey. See Methodology for details.
The U.S. has invested heavily in educating and training these international graduates to do these critical jobs, and most graduates want to stay to do that work here. Many already have hands-on experience working for a U.S. employer through the OPT program. To shut the door on them and force them to take their education and skills to our economic competitors would be a tremendous waste and long-term loss for our country.
FWD.us estimates that about 100,000 international student graduates each year would, on average over the next decade, stay in the U.S. long term, or four or more years, to work in their fields of study. This amounts to about an equal number of undergraduate (50,000) and graduate (50,000) students. Of these prospective international students hoping to stay in the U.S. long term, most (66%) would be seeking jobs in business management, health, and STEM industries, numbering about 66,000 undergraduate and graduate students each year contributing to the highly skilled workforce in these fields.13
Note: STEM-related fields include business management and health subjects. Survey questions used for estimation: “If you were graduating from your intended degree program today, would you seek a visa to stay and work within the U.S. if a visa was easily accessible to you?” Among those saying yes, “How long would you ideally like to live and work in the U.S. following graduation?” Shares for those desiring to stay were applied to average, annual projected number of international student graduates between 2021-2022 and 2030-2031 school years.
Source: FWD.us estimates. See Methodology for details.
Providing a clear legal avenue for international students based on their U.S. education after graduation would significantly reduce our shortage of highly skilled labor in the short term, and strengthen our global competitiveness over the long term.
Many international students also go on to start their own companies, hiring even more workers and growing the economy. And with graduates making up a quarter of cofounders of billion-dollar startups, new, legal avenues for graduating international students to stay and work in the U.S. will only create more jobs.
According to FWD.us estimates, the U.S. economy stands to gain up to $233 billion between 2022 and 2030, including some $65 billion in combined federal, state, and local taxes, if Congress enacts a permanent pathway for 100,000 international student graduates each year.14
By filling these job shortages with international student graduates, such a policy would add millions of dollars to state economies, as well as millions in additional state and local taxes. Consequently, the economic impact of retaining our international student graduates is not only good for the American economy as a whole, but also for individual state economies.
Note: Estimates for Alaska, New Mexico, Maine, and Vermont unavailable.
Source: FWD.us estimates. See Methodology for more information.
Passing legislation that provides a permanent path for international student graduates will allow talented people from around the world to build their careers in the U.S., while expanding our economy. It is truly a win-win situation. Congress needs to find a bipartisan solution now to increase our global competitive advantage and further grow our economy.
We need your help to move America forward. Learn what you can do.
According to FWD.us estimates, 100,000 international student graduates