How International Students Affect Domestic Students’ Achievement: Evidence From the OPT STEM Extension

In this chapter, the author investigates the effects of international student enrollment on the academic performances of domestic students in US higher education. The author leverages the large and rapid increase in international student enrollment after 2008, driven by an extension of the Optional Practical Training duration that incentivized more international students to pursue US college degrees. Using administrative data linked to first-year salaries, the author finds that a 10 percentage point increase in the share of international students in science, technology, engineering, and mathematics (STEM) courses reduces domestic students’ grades by 0.06 points on a 4-point scale. This effect appears to be primarily driven by the relatively higher latent math ability of international students, which intensifies competition within STEM courses. Despite this “crowd-out” effect on grades, there is no evidence of adverse effects on domestic students’ first-year salaries.