...foreign student demand for U.S. doctorate programs, especially in science and engineering, has grown in countries where undergraduate education has expanded.
One of the most significant transformations in U.S. graduate education and the international market for highly-trained workers in science and engineering during the last quarter century is the representation of students from outside of the United States among the ranks of doctorate recipients from U.S. universities. In all but the life sciences, the foreign share of Ph.D. recipients now equals or exceeds the share from the United States. Students from outside the United States accounted for 51 percent of Ph.D. recipients in science and engineering in 2003, up from 27 percent in 1973. In 2003, doctorate recipients from outside the United States accounted for 50 percent of Ph.D.s awarded in the physical sciences, 67 percent in engineering, and 68 percent in economics.
In Internationalization of U.S. Doctorate Education (NBER Working Paper No. 14792), authors John Bound, Sarah Turner, and Patrick Walsh highlight the importance of changes in demand among foreign-born students in explaining the growth and distribution of doctorates awarded in science and engineering. They find in particular that foreign students' demand for U.S. doctorate programs, especially in science and engineering, has grown in countries where undergraduate education has expanded. Many foreign students specialize in those fields as undergraduates: in 2004, China awarded 60 percent of its undergraduate degrees in science and engineering, while the concentrations were lower in European countries including in Great Britain at 35 percent, and in the United States at 32 percent.
Beyond the increase in numbers of foreign undergraduate students prepared for graduate work, periodic 'demand shocks' affect foreign representation in U.S. doctorate programs. These include increased birth-cohort size and undergraduate degree attainment in countries of origin, development of networks among successful immigrants in the United States, and political transformations, such as the fall of the Soviet Union in 1989, the fall of the Shah and American hostage crisis in Iran in 1979, and normalization of relations with China in the early 1980s. However, there is little evidence to suggest that these demand shocks have led to direct 'crowd-out' or reductions in degree attainment among U.S. residents, the authors find. For example, the large influx of Chinese students in the early 1980s had no discernible impact on the number of students from the United States or any other nation receiving doctorates in the sciences. Instead, the overall number of doctorates increased, with foreign student representation increasing particularly at less highly ranked U.S. programs.
While there is no direct evidence of crowd out in doctoral programs, the influx of foreigners into the science and engineering labor market in the United States has changed the return to investment in advanced degrees in science and engineering for U.S. residents. Bound, Turner, and Walsh suggest that these effects explain why domestic demand for programs in science and engineering has remained stagnant or declined in the period of increasing foreign demand. Over the last quarter century, the relative returns to U.S. students from advanced study in the sciences have not increased. Labor market data show that the earnings of new advanced degree recipients in science-and-engineering fields trail earnings for other college-educated workers. At U.S. universities, the extended duration of low-wage post-doctorate appointments has lengthened the time between entry and completion of graduate school; the salary gap between senior and junior faculty has widened; and permanent university employment is uncertain.
-- Sarah H. Wright