Importance of International STEM Student Attraction, Retention

Attracting and retaining talented workers is a critical element in a technology-based economy.  In the U.S., a major source of this talent comes from international students, many of whom stay in the United States to work after graduation – especially in STEM industries. New research from economists at the University of California at Santa Barbara examines why international students may choose to study in the U.S., as well as what compels them to either remain in the country or go elsewhere after earning their degrees. Citing future job opportunities as the main reason, most international students (48 percent) hope to stay in the United States after graduation, while only 12 percent wish to leave, and 40.5 percent are undecided. The undecided group may represent a critical pool of STEM talent that could become part of the workforce, according to the authors.

Will They Stay or Will They Go? International STEM Students Are Up for Grabs, a newly released report by Richard Appelbaum and Xueying Han at the University of California at Santa Barbara on behalf of the Kauffman Foundation, explores the characteristics of domestic and international students enrolled in STEM programs at the 10 U.S. universities with the largest number of international students. The report’s findings draw from 2,322 responses to an email survey.

Citing future job opportunities as the main reason, the authors find that most international students (48 percent) hope to stay in the United States after graduation, while only 12 percent wish to leave, and 40.5 percent are undecided. The authors also note that international students are significantly more likely than their domestic counterparts to desire and seek employment with a company, while they are significantly less likely than domestic students to want to work for a governmental agency or be unsure of what they want to do upon graduation.

Applebaum and Han find evidence that STEM-focused international students who want to seek employment with a company or start their own companies are significantly more likely to want to remain in the United States. An important reason for this interest stems from the students’ original purpose for studying in the U.S.; if a student selected future career opportunities as their intention for deciding to study in the United States, there is an 87 percent likelihood he or she wants to stay.

Ultimately, the authors note that although there is demand for international talent to stay in the U.S. coming from both students and employers – especially in technology industries – U.S. immigration policy makes it difficult to retain international student talent. In the authors’ survey, they find that while more than 40 percent of international students are undecided about whether or not to stay in the United States, more than one-third of them are aware of programs designed to lure them back to their countries of origin. As a result, the authors suggest the following policy implementations that would allow for increased retention of international STEM students in the United States:

• Amend the H-1B visa system to allow individuals to switch jobs and employers;
• Increase the annual H-1B visa cap from 65,000 to between 115,000 and 195,000, depending on demand and market conditions, by adopting the Immigration Innovation Act, otherwise known as the I-Squared Act;
• Adopt the Stopping Trained in America Ph.D.s from Leaving the Economy (STAPLE) Act of 2015, which would allow international STEM students who have earned a Ph.D. in the U.S. and have received job offers from U.S. employers to be exempted from H-1B visa limitations and admitted for permanent resident status;
• Amend the H-1B visa system to allow all individuals to switch employers/jobs, helping them to maximize their economic output; and,
• Avoid lumping legal and illegal immigration together in one bill as a way to increase the likelihood that at least some measures could be passed through Congress.

International students have entered the spotlight in the United States for two main reasons: their increased attendance at American universities, and their propensity to major in STEM-focused areas.

The November 2015 Open Doors Report on International Educational Exchange from the Institute of International Education found that in the 2014-2015 academic year, the number of international students at U.S. colleges and universities increased by 10 percent to a record high of 974,926 students, the fastest rate of growth in 35 years. In addition to higher-tuition rates, these international students also contributed $30.5 billion and more than 373,000 jobs to the U.S. economy during that same academic year, according to the NAFSA International Student Economic Value Tool.

One possible reason for this increase in international students is the decline in public funding for universities. A March 2016 research report from the Populations Studies Center at the University of Michigan finds that for the period between 1996 and 2012, a 10 percent reduction in state appropriations was associated with an estimated increase in foreign enrollment of 12 percent at public research universities and approximately 17 percent at resource-intensive AAU public universities. In A Passage to America: University Funding and International Students, the authors also find that these increases in foreign enrollment are associated with in-state enrollment declines . In other words, decreases in state-funding have made universities – especially public universities – more likely to desire high-tuition paying international students, simultaneously making university demographics more international and less populated by in-state students. A January 2016 Washington Post article notes similar trends in universities becoming more out-of-state focused due to funding issues. Although attracting foreign students has become an increasingly realistic necessity for many universities, The New York Times notes there are also concerns with high-pressure sales tactics and compromised economic standards.

International students have also gained attention due to their propensity to major in high-impact, STEM-focused areas. SSTI previously highlighted recent research from the Information Technology and Innovation Foundation (ITIF) that detailed the critical role immigrants play in developing some of the most notable innovations in the U.S. While that study looked at particular inventions, SSTI also covered research from the National Foundation for American Policy (NFAP) that found that a majority of startup companies valued at $1 billion or more were started by immigrants. A recent TechCrunch article highlights the importance of these international students to the U.S. technology industry.