“The Local Economic Impact of International Students: Evidence from US Commuting Zones”
[PDF] | (New draft coming soon)
Abstract: Despite the rising costs of higher education, enrollment of international students in the United States has grown dramatically over the past few decades. While increases in international enrollment have been shown to contribute to a vibrant higher education sector, the effects on local economies surrounding universities and colleges are less understood. This paper uses administrative data covering the universe of international students enrolled in US higher education between 2001 and 2015 to study their short-term effects on local labor markets and ﬁrms. I implement an instrumental variable estimation approach that takes advantage of the supply-push components of changes in US enrollment, proxied by ﬂuctuations in the outﬂows of students across countries of origin to other English-speaking destinations. I show that international students lead to substantial increases in local jobs and earnings: one additional student per thousand residents increases the employment to population ratio by 0.39 percentage points and average wages by 0.83 percent. These effects are concentrated in non-tradable industries, particularly in construction, retail, and services. Consistent with general equilibrium models with heterogeneous firms, local demand shocks induced by an increase in enrollment also result in signiﬁcant within-industry labor reallocations as more efficient firms enter and expand while the least efficient ones contract and exit. Overall, these findings highlight substantial economic beneﬁts from foreign students in the form of increases in local income and aggregate productivity.
“Household Resources and Investments in Children’s Higher Education: The Role of Intra-Household Bargaining”
Abstract: Across many economic settings, children from wealthier households are more likely to attend postsecondary education. Recent studies have questioned the roles of short-run credit constraints in explaining this relationship and emphasized other long-run determinants that could be correlated with family wealth. This paper argues that when couples disagree on how much to invest in children’s education, the extent to which household resources translate into educational attainment critically depends on who controls household resources. Using labor force and household survey data from Indonesia, I examine the importance of intra-household decision making in affecting children’s university enrollment. Consistent with Nash-bargaining models of household decision making, changes in women’s outside options relative to men’s result in more decisions made within the household by women, especially those related to expenditures on children. Accordingly, relative improvements in women’s bargaining power when children graduate from high school significantly increase their likelihood of university enrollment, holding household resources and children’s ability indicators constant. This effect is quantitatively similar for both boys and girls. Overall, these findings suggest that intra-household bargaining power is a potentially important mediator of the effects of household resources on children’s participation in higher education.
“Parental Risk Preferences, Intra-household Decision Making, and Investments in Children’s Higher Education: Evidence from Indonesia”
Abstract: This paper examines parents’ investments in children’s education in the presence of uncertainty in returns and intra-household heterogeneity in parental risk preferences. Consistent with a Chiappori-type collective model of household decision making, I find that both fathers’ and mothers’ risk aversion significantly decrease children’s tendency to enroll in higher education, although the effects depend critically on the distribution of intra-household bargaining power. Additional results show that parental risk aversion also affects children’s labor market entry upon high school graduation. These findings highlight the roles of parental risk preferences and intra-household bargaining dynamics as important mechanisms that contribute to intergenerational persistence in economic outcomes.
Work in progress
“Contract Employment and Life-Cycle Wage Growth in Developing Countries: Evidence from Matched Employer-Employee Data”
“International Students and Natives’ Attitude Towards Immigration” with Julia Zhu