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A Passage to America: University Funding and International Students

Author

Listed:
  • John Bound
  • Breno Braga
  • Gaurav Khanna
  • Sarah Turner

Abstract

The number of international undergraduate students at US public research universities increased dramatically over the past two decades, alongside concurrent reductions in state support for universities. We show that these trends are closely connected as public research universities relied on foreign students to cushion the effects of falling appropriations. The growing capacity in emerging economies to pay for a US education provided opportunities for universities to recover revenues from full-fare-paying foreign students. We estimate that between 1996 and 2012, a 10 percent reduction in state appropriations led to an increase in foreign enrollment of 16 percent at public research universities.

Suggested Citation

  • John Bound & Breno Braga & Gaurav Khanna & Sarah Turner, 2020. "A Passage to America: University Funding and International Students," American Economic Journal: Economic Policy, American Economic Association, vol. 12(1), pages 97-126, February.
    • Handle: RePEc:aea:aejpol:v:12:y:2020:i:1:p:97-126
    DOI: 10.1257/pol.20170620
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    References listed on IDEAS

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    1. Bound, John & Turner, Sarah, 2007. "Cohort crowding: How resources affect collegiate attainment," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 877-899, June.
    2. Stephen Machin & Richard Murphy, 2017. "Paying out and crowding out? The globalization of higher education," Journal of Economic Geography, Oxford University Press, vol. 17(5), pages 1075-1110.
    3. John Bound & Murat Demirci & Gaurav Khanna & Sarah Turner, 2015. "Finishing Degrees and Finding Jobs: US Higher Education and the Flow of Foreign IT Workers," Innovation Policy and the Economy, University of Chicago Press, vol. 15(1), pages 27-72.
    4. John Kennan, 2015. "Spatial Variation in Higher Education Financing and the Supply of College Graduates," NBER Working Papers 21065, National Bureau of Economic Research, Inc.
    5. Dennis Epple & Richard Romano & Sinan Sarpça & Holger Sieg, 2013. "The U.S. Market for Higher Education: A General Equilibrium Analysis of State and Private Colleges and Public Funding Policies," NBER Working Papers 19298, National Bureau of Economic Research, Inc.
    6. John Bound & Michael F. Lovenheim & Sarah Turner, 2010. "Why Have College Completion Rates Declined? An Analysis of Changing Student Preparation and Collegiate Resources," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 129-157, July.
    7. World Bank, 2016. "World Development Indicators 2016," World Bank Publications - Books, The World Bank Group, number 23969.
    8. Dennis Epple & Richard Romano & Holger Sieg, 2006. "Admission, Tuition, and Financial Aid Policies in the Market for Higher Education," Econometrica, Econometric Society, vol. 74(4), pages 885-928, July.
    9. Gordon C. Winston, 1999. "Subsidies, Hierarchy and Peers: The Awkward Economics of Higher Education," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 13-36, Winter.
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    More about this item

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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