Outdated Immigration Laws: Bad for Students, Worse for Local Economies

Dave Cutler for The Chronicle

September 25, 2016

In Illinois, an effort is underway to bring Chinese students into the craze of Big Ten football.

Since 2015 the University of Illinois at Urbana-Champaign has offered a play-by-play live stream of its football games in Mandarin — not only to better engage Chinese students on the campus, but also to build a following of future Illini in China. Such efforts have paid off. The university is now home to the largest cohort of the 304,000 Chinese students in the United States.

This year’s presidential campaign has polarized the American public on the subject of immigration, with talk of sealing borders and building walls. But the higher-education community has long been more interested in building bridges, going to great effort and expense to attract international students. On campuses across the country, their world-class talent is a boon to academic classes, and their out-of-state tuition dollars support scientific research.

And now the energy and innovation that higher education has used to recruit international students is urgently needed to advance immigration-reform efforts that would allow the United States to retain this talent after graduation.

This summer hundreds of thousands of international students — including many from China — packed their bags to return, degrees in hand, to their home countries. Their F-1 student visas expired when they graduated in the spring, and now their 60-day grace period to stay is closing.

It’s the outdated U.S. immigration system that leaves these students few options to work long-term in the United States after they complete their studies. Our recent research report, "Opportunity Lost," written with Gaetano Basso for the Chicago Council on Global Affairs, shows that almost no international students are working in their colleges’ local economies five years after graduation.

The United States is becoming a net exporter of global talent.

This reality is frustrating to international students — and to the employers who would like to hire them. Many of these graduates hold degrees in sought-after STEM fields, in which there are growing shortages of workers. Analysts predict that 2.4 million STEM jobs could go unfilled in the United States by 2018.

The exodus of this global talent is costly. International students are concentrated in the Rust Belt, where many local economies remain stagnant. Of the 10 colleges with the largest populations of F-1 visa holders, four — Purdue University, Indiana University, and Michigan State University, along with the University of Illinois — are in the Midwest. The 12-state region would stand to gain a cumulative $3.2 billion in income by fully retaining foreign-born students in local work forces, along with nearly $123 million in aggregate state income tax, according to the council’s report.

Shifting the analysis to include the 10 states with the largest concentrations of F-1 visa holders, those numbers jump to $8.3 billion in income and $283 million in taxes.

Economic research shows that these gains in employment and local income from college-educated foreign workers do not come at the expen

Gains in employment and local income from college-educated foreign workers do not come at the expenses of the native-born, who will also benefit from firm expansion, higher local demand, and economic growth.
ses of the native-born, who will also benefit from firm expansion, higher local demand, and economic growth.

What’s more, cash-strapped public universities cannot afford such significant missed opportunities to increase state revenues. Given steadily declining state expenditures for higher education, universities throughout Illinois have been saddled with layoffs and furlough days, with at least one opting to end the academic year early. Fiscal shortfalls still threaten to choke off funding for higher education in other states as well.

Beyond state budgets, the country’s obsolete immigration system affects higher education in other ways.

The United States no longer has a monopoly on world-class universities. Ambitious students quite literally have a world of options available to them, and they can afford to be selective. Many want to study in a place where they will be able to eventually build a career. Other countries — Canada, Ireland, Chile, and Singapore among them — offer handsome incentives and support to foreign-born entrepreneurs, students included. The United States does not offer entrepreneurs even a visa. (Investor visas, a popular pathway for aspiring entrepreneurs, require access to significant capital — and the recently proposed International Entrepreneur Rule could be subject to changes under a new administration in 2017.) Until the immigration system catches up with that reality, universities will have to redouble their efforts to recruit world-class students.

And if Donald Trump’s anti-immigrant rhetoric solidifies into anti-immigrant policy in the White House, the situation might get worse. Sixty percent of 40,000 students surveyed in 118 countries said they would be less likely to pursue study in the United States if Trump is elected president.

Against this backdrop of polarizing rhetoric and woefully outdated policies, immigration reform is again on the horizon for 2017 — and it is urgent that those who understand the challenges of the current system speak up. Only Congress can build the visa channels that would expand opportunities for international students, but the higher-education community can identify fresh options to update an outdated system.

Universities can advocate for programs that offer innovative work extensions to holders of F-1 and other visas. Anchored by higher-education institutions, economically struggling regions could grant place-specific work extensions that would initially limit students’ employment to the immediate geographical area. The proposal recognizes the local economy’s investment in the education of international graduates and bolsters universities’ commitment to attracting highly skilled students to revitalize local economies.

Some universities have been resourceful in working within the immigration system to employ foreign-born entrepreneurs through campus-based business incubators and local start-ups. Those efforts are ripe to be replicated in other parts of the country and can prompt Congress to think creatively about expanding visa channels.

Those in higher education have long understood the value, beyond tuition dollars, of attracting foreign-born talent to their campuses. Now is the time to speak up about the hurdles created by our outdated immigration system and to offer up the innovative ideas that can make reform a reality.

Giovanni Peri is a professor and chair of the department of economics at the University of California at Davis. Sara McElmurry is assistant director of immigration at the Chicago Council on Global Affairs. They are co-authors of the report "Opportunity Lost: The Economic Benefit of Retaining Foreign-Born Students in Local Economies."