Abstract

International higher education in developed nations is increasingly exposed to abrupt shifts in immigration rules and post-study work (PSW) pathways. This study examines how changes in PSW duration, eligibility, and employer-sponsorship predictability reshape (i) international student inflows, (ii) university net tuition and research cross-subsidies, and (iii) graduate retention and local labor-market indicators, with particular attention to the United States while benchmarking the United Kingdom, Canada, and Australia. We measure PSW regimes through an intensity index with a monthly time series and a predictability of sponsorship, and we connect policy shocks to outcomes through a staggered difference-in-differences/event study approach, supplemented by synthetic control studies for large discrete policy changes. The empirical strategy reports complete model results (sample sizes, fixed effects, clustered standard errors, and pre-trend tests) and distinguishes between short-term enrollment outcomes, medium-term retention/completion, and institutional financial outcomes. Across policy events, a reduction in PSW routes is linked to a decrease in international enrolments and net tuition revenues, while a relaxation of PSW rules is linked to better inflows and more stable cross-subsidies between tuition and research. Outcomes related to graduate retention are consistent with PSW accessibility and correlate with changes in vacancy-fill measures in skill-intensive industries. The results are discussed in terms of policy-activated changes in the return on study and work, mediated by network externalities and institutional discount rate behavior.

Keywords

Immigration Policy, Post Study Work Rights, International Students, University Finance, Endogenous Migration, Labor Markets,

Metrics

Metrics Loading ...

References

  1. Altbach, P.G., Reisberg, L. (2017). Global: Another week, another scandal: Immigration dilemmas and political confusion. In P. G. Altbach & H. de Wit (Eds.), Understanding higher education internationalization. Global Perspectives on Higher Education, Sense Publishers, Rotterdam, 103–106. https://doi.org/10.1007/978-94-6351-161-2_22
  2. Amuedo-Dorantes, C., Romiti, A. (2024). International student applications in the United Kingdom after Brexit. Journal of Economic Geography, 24(5), lbae019. https://doi.org/10.1093/jeg/lbae019
  3. Amuedo-Dorantes, C., Shih, K., Xu, H. (2023). The implications of Optional Practical Training reforms on International Student Enrollments and Quality. Economic Inquiry, 61(2), 253–281. https://doi.org/10.1111/ecin.13128
  4. Australian Government Department of Home Affairs. (2024). Temporary Graduate visa (subclass 485) Post Study Work stream. https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/temporary-graduate-485
  5. Australian Government Department of Home Affairs. (2025). Temporary Graduate 485 Post Higher Education Work stream. https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-listing/temporary-graduate-485/post-higher-education-work
  6. Beine, M., Docquier, F., Özden, Ç. (2011). Diasporas. Journal of Development Economics, 95(1), 30–41. https://doi.org/10.1016/j.jdeveco.2009.11.004
  7. Borjas, G.J. (2003). The labor demand curve is downward sloping: Reexamining the impact of immigration on the labor market. The Quarterly Journal of Economics, 118(4), 1335–1374. https://doi.org/10.1162/003355303322552810
  8. Bound, J., Braga, B., Khanna, G., Turner, S. (2021). The globalization of postsecondary education: The role of international students in the US higher education system. Journal of Economic Perspectives, 35(1), 163–184.https://doi.org/10.1257/jep.35.1.163
  9. Card, D. (2005). Is the new immigration really so bad? The Economic Journal, 115(507), F300–F323. https://doi.org/10.1111/j.1468-0297.2005.01037.x
  10. Chen, M., Howell, J., Smith, J. (2023). Best and brightest? The impact of student visa restrictiveness on who attends college in the US. Labour Economics, 84, 102385. https://doi.org/10.1016/j.labeco.2023.102385
  11. Dizon, J.P.M., Harper, J., Kezar, A. (2022). Using strategies elites understand: Divestment as an approach to social change. Peabody Journal of Education, 97(5), 584–599. https://doi.org/10.1080/0161956X.2022.2125759
  12. Docquier, F., Lodigiani, E., Rapoport, H., Schiff, M. (2016). Emigration and democracy. Journal of Development Economics, 120, 209–223. https://doi.org/10.1016/j.jdeveco.2015.12.001
  13. Dustmann, C., Frattini, T. (2014). The fiscal effects of immigration to the UK. The Economic Journal, 124(580), F593–F643.https://doi.org/10.1111/ecoj.12181
  14. Hunt, J., Gauthier-Loiselle, M. (2010). How much does immigration boost innovation? American Economic Journal: Macroeconomics, 2(2), 31–56. https://doi.org/10.1257/mac.2.2.31
  15. Immigration, Refugees and Citizenship Canada. (2025a). About the post-graduation work permit (PGWP). Government of Canada. https://www.canada.ca/en/immigration-refugees-citizenship/services/study-canada/work/after-graduation/about.html
  16. Immigration, Refugees and Citizenship Canada. (2025b). Update on field of study requirement for post-graduation work permits. Government of Canada. https://www.canada.ca/en/immigration-refugees-citizenship/news/notices/update-requirement-post-graduation-work-permits.html
  17. Kerr, W.R., Lincoln, W.F. (2010). The supply side of innovation: H 1B visa reforms and US ethnic invention. Journal of Labor Economics, 28(3), 473–508. https://doi.org/10.1086/651934
  18. Khoo, P. (2025). Khoo, P. (2025). If you extend it, they will come: The effects of the STEM OPT extension. Applied Economics, 1-15. https://doi.org/10.1080/00036846.2025.2551288
  19. McKenzie, D., Rapoport, H. (2007). Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico. Journal of Development Economics, 84(1), 1–24. https://doi.org/10.1016/j.jdeveco.2006.11.003
  20. Migration Advisory Committee. (2024). Graduate route rapid review. UK Home Office. https://www.gov.uk/government/publications/graduate-route-rapid-review
  21. Munshi, K. (2003). Networks in the modern economy: Mexican migrants in the US labor market. The Quarterly Journal of Economics, 118(2), 549–599. https://doi.org/10.1162/003355303321675455
  22. NAFSA: Association of International Educators. (2024). International student economic value tool (2023–2024 results and methodology). https://www.nafsa.org/policy-and-advocacy/policy-resources/nafsa-international-student-economic-value-tool-v2
  23. OECD. (2022). International migration outlook 2022. OECD Publishing. https://doi.org/10.1787/30fe16d2-en
  24. OECD. (2023). Education at a glance 2023: OECD indicators. OECD Publishing. https://doi.org/10.1787/3197152b-en
  25. Ottaviano, G.I., Peri, G. (2012). Rethinking the effect of immigration on wages. Journal of the European Economic Association, 10(1), 152–197. https://doi.org/10.1111/j.1542-4774.2011.01052.x
  26. Peri, G., Shih, K., Sparber, C. (2015). STEM workers, H 1B visas, and productivity in US cities. Journal of Labor Economics, 33(S1), S225–S255. https://doi.org/10.1086/679061
  27. Webber, D.A. (2017). State divestment and tuition at public institutions. Economics of Education Review, 60, 1–4. https://doi.org/10.1016/j.econedurev.2017.07.007
  28. Yang, S., Ye, X., He, D. (2023). Global pathways: New evidence on the international graduate school choice of Chinese outbound students. Higher Education, 86(6), 1415–1454. https://doi.org/10.1007/s10734-022-00979-6