Do Foreign Graduate Students Create Efficiencies in Research Universities?
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A vicious cycle has been created. It is not cost effective for a U.S. native to enter graduate school because the five or six years required to complete a Ph.D. imply an opportunity cost of hundreds of thousands of dollars in the form of employment in the private sector without the doctorate. On the other hand, research universities need graduate students to work in their laboratories and thereby generate federal grant revenue. The absence of U.S. natives creates openings for foreign students to fill. With the help of the National Science Foundation and an alleged shortage of scientists and engineers in the late 1980’s, research universities increased the enrollment of foreign students in their graduate programs, notably in the science and engineering (S&E) disciplines. The swelling of foreign student enrollment in S&E constructed the argument that foreign students are now entering the programs that natives find too challenging; when in reality obtaining a Ph.D. does not pay. This thesis explored whether and how research universities are gaining additional expenditures by giving preference to foreign students over natives. Three regression analyses discovered foreign students were more “efficient” than their native counterparts. Annual reduction of R&D outlays of 14 million dollars was discovered. It is theorized the efficiencies are obtained due to visa restrictions placed on the foreign students as it guarantees that the training invested in the student is kept during the duration of the grant ensuring on-time delivery to the sponsor. Principle investigators have a high stake in protecting their research projects from poaching and externality costs.