NORC at the University of Chicago
Attracting Talent: Location Choices of Foreign-Born PhDs in the United States
Author(s): Jeffrey Grogger and Gordon H. Hanson
Source: Journal of Labor Economics, Vol. 33, No. S1, US High-Skilled Immigration in the Global
Economy (Part 2, July 2015), pp. S5-S38
Published by: University of Chicago Press on behalf of the Society of Labor Economists and the
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Attracting Talent: Location Choices
of Foreign-Born PhDs
in the United States
Jeffrey Grogger, University of Chicago and NBER
Gordon H. Hanson, University of California, San Diego,
and NBER

We analyze location choices of foreign-born science and engineering students receiving PhDs from US universities. Foreign students
who stay in the United States are positively selected on observables.
They tend to stay in the United States during periods of strong US
economic growth and during periods of weak home country economicgrowth. Foreignstudentsfromhigher-incomecountries and fromrecently democratized countries tend not to remain in the UnitedStates. Education and innovation may therefore be part of a virtuous
cycle by which education enhances a country’s prospects for innovation and innovation makes the country more attractive for scientists and engineers.
I. Introduction
Scientists and engineers are the core of the high-skilled labor force in the
United States. They are key inputs in research and development ðKapur and
McHale 2005Þ, patent at much higher rates than other professionals ðHunt
and Gauthier-Loiselle 2010Þ, and are relatively likely to create high-We thank the International Growth Centre for financial support and Sam
Bazzi, Sieuwerd Gaastra, Chen Liu, and Wei You for excellent research assistance.
Contact the corresponding author, Jeffrey Grogger, at jgrogger@uchicago.edu.
[ Journal of Labor Economics, 2015, vol. 33, no. 3, pt. 2]© 2015 by The University of Chicago. All rights reserved. 0734-306X/2015/33S1-0010$10.00
Submitted January 30, 2013; Accepted May 3, 2014; Electronically published June 29, 2015

S5

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S6

Grogger/Hanson

technology companies ðZucker and Darby 2007Þ. Recent theories of economic growth suggest that expanding the science and engineering ðS&EÞ
talent pool would raise the long-run growth rate of the US economy ðJones
1995a, 1995bÞ.1
Foreign students comprise the most rapidly growing segment of the
US S&E labor force. Over the last several decades, the share of S&E PhDs
granted by US universities going to the foreign-born rose sharply, from
12% in 1970 to 36% in 2011.2 Whether newly minted degree holders choose
to stay in the United States after graduation or to return home helps determine how quickly the supply of US S&E labor can expand. Yet we know
relatively little about the factors governing the location choices of these
individuals. Existing work examines how the supply of foreign graduate
students affects research output by US universities ðStuen, Mobarak, andMaskus 2010Þ and the earnings and employment of US graduate studentsðBorjas 2009; Lan 2011Þ. Other research considers how the inflow of scholars to the United States following the collapse of the Soviet Union altered
the career trajectories of US academics ðBorjas and Doran 2012a, 2012bÞ.3
But little work considers who stays in the United States upon completionof a PhD.4
In this paper, we analyze the selectivity of foreign-born students receiving PhDs from US universities who intend to stay in the United States
after completing their degree. We also analyze how economic and politicalconditions influence such students’ intentions to stay in the United States.
We use data from the NSF Survey of Earned Doctorates ðSEDÞ, which contains information on the characteristics of all individuals receiving a PhD
from a US university from 1958 forward. Our data span the period 1960–
2008. Crucially, the SED asks individuals if they intend to stay in the UnitedStates in the year following degree completion. Intent-to-stay rates reported
in the SED closely track actual stay rates of foreign PhD graduates derived
from earnings reported to the Social Security Administration in the years
following degree completion ðFinn 2010Þ.
Hunt and Gauthier-Loiselle ð2010Þ and Kerr and Lincoln ð2010Þ find that US
regions that attract more high-skilled immigrants produce larger numbers of S&E
patents.
2
These shares exclude from the foreign-born those who are US citizens, are US
legal permanent residents, or attended high school in the United States. The sharepeaked at 42% in 2007, before declining during the Great Recession.
3
Related work includes Bound et al. (forthcoming), which considers how inflows of high-skilled immigrants during technology booms affect the labor market for computer scientists in the United States.
4
Also using the Survey of Earned Doctorates, Black and Stephan ð2007Þ find thathaving personal or work ties in the United States or coming from a higher-ranked
US program is correlated with intent to stay in the United States after obtaining a
PhD.
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Location Choices of Foreign-Born PhDs in the United States

S7

In measuring the selectivity of foreign-born US S&E PhD recipients
who intend to stay in the United States, we ask whether there is positive selection even among very highly educated immigrants.5 While we do not observe student test scores or other direct measures of academic ability, we doobserve indirect measures of potential, including parental education, whether
a student receives fellowships or scholarships during the course of study,
and the rankings of a student’s PhD program and university. Students who
receive merit-based financial support and who have more educated parents
are more likely to desire to stay in the United States.
We also analyze the link between economic conditions, both in the
United States and in the source country, and foreign students’ intention tostay in the United States. There is an enormous literature on how income
affects migration decisions. Our contribution is to examine how these location decisions track economic and political cycles. We find that, controlling for time trends and birth country fixed effects, foreign-born students
are more likely to intend to stay in the United States the higher is the recent
rate of US GDP growth, the lower is the recent rate of GDP growth in thebirth country, and the lower is the level of development in the birth country. These results mesh with recent studies that document how economic
conditions at the time of labor market entry affect long-run employment
and earnings for high-skilled individuals.6 They also show that booms in the
United States help keep foreign PhDs from departing, whereas booms in thebirth country draw students home. These patterns suggest that there is procyclicality in the supply of very highly skilled labor in the United States.
Finally, we use Polity IV scores to analyze how source country political conditions affect the location intentions of foreign-born PhD studentsðMarshall and Jaggers 2002Þ. Previous work has examined whether the return of students trained in foreign universities affects democratic transitions in the home country ðSpilimbergo 2009Þ. We ask the reverse question of whether democratic transitions at home lure back US-trained PhD
students. When a student’s birth country becomes more democratic, thelikelihood that a graduate returns home increases, suggesting that politicalopening induces the return of high-skilled labor from abroad.
5

Substantial literature finds evidence consistent with the positive selection of moregeneral groups of migrants. See Rosenzweig ð2006Þ, Belot and Hatton ð2008Þ, de Grip,
Fouarge, and Sauermann ð2009Þ, and Grogger and Hanson ð2011Þ. On the determinants of immigration in high-income countries, see Clark, Hatton, and Williamson
ð2007Þ, Ortega and Peri ð2009Þ, and Mayda ð2010Þ.
6
For example, Oyer ð2008Þ finds that better stock market conditions while MBA
students are in graduate school positively affect the likelihood of their finding employment in investment banking. Graduates who initially take jobs on Wall Street
tend to have higher long-run income. Similar findings hold for economists ðOyer 2006Þ
and for college graduates more generally ðKahn 2010; Oreopoulos, von Wachter, andHeisz 2012Þ.

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In the next section, we describe the data used for the project and discussbroad trends regarding the location choices of foreign PhD students educated in the United States. In Section III, we present our empirical specification and results on the intent to stay in the United States. In Section IV,
we use our empirical results to decompose variation in stay rates for PhDs
for the four largest source countries. In Section V, we offer concluding remarks.
II. Data and Empirical Setting
The Survey of Earned Doctorates ðSEDÞ covers all individuals receiving a PhD from an accredited US institution from 1958 forward. We havedata through 2008, which include 1.6 million observations. From this sample, we drop individuals who were born in the United States or in US territories ðN 5 1.1 millionÞ; obtained degrees before 1960, years for which welack national economic data ðN 5 2,000Þ; obtained PhDs from non–research
universities ðN 5 9,000Þ; are missing data on place of birth ðN 5 56,000Þ; orare missing data on postgraduation plans ðN 5 6,000Þ. We further drop
individuals 45 years of age or older at time of degree ðN 5 28,000Þ, which
consist primarily of those who complete their PhDs over multiple decades
and who may not be comparable to the full-time students that constitute thebulk of the sample. Finally, we drop individuals who attended high schoolin the United States, who are US citizens, or who hold green cards ðN 5
40,000Þ. This lets us focus on the behavior of individuals who came to theUnited States for higher education rather than because of location decisionsof their parents or for other reasons. Table A1 gives summary statistics on
the SED and other data used in the empirical estimation.
Our focus is on graduates in science and engineering fields. However, insome regressions we also consider students in other fields of study. S&E
fields are those most closely linked to innovation. Using data from the 2003
US National Survey of College Graduates, Hunt and Gauthier-Loiselle
ð2010Þ find that foreign-born scientists and engineers are substantially more
likely than other college graduates or postgraduates to have produced a patent and are more likely still to have produced a patent that has been commercialized. S&E fields include life sciences ðagricultural, biological, andhealth sciencesÞ, physical sciences ðatmospheric, earth, and ocean sciences;chemistry; mathematics and computer science; and astronomy and physicsÞ, and engineering.
A. Rising Presence of the Foreign-Bornamong US S&E PhD Recipients
The rising presence of foreign students among new US S&E PhD recipients has brought with it a change in the composition of the birth countries represented by these students. Figure 1 shows the share of the foreignborn among all new S&E PhDs from US universities with the birth countries

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Location Choices of Foreign-Born PhDs in the United States

S9

FIG. 1.—Foreign-born S&E PhDs by birth region. Low-income countries aredefined as those with per capita GDP less than $800, middle-income countries as thosebetween $800 and $8,000, and high-income countries as those over $8,000; all basedon 1985–94 GDP/capita.

of these students grouped by low-, middle-, or high-income status.7 In the
1960s, the three income groups each accounted for roughly equal shares of
new US S&E PhDs. Over time, the share of S&E PhDs from high-income
countries has been flat, due in part perhaps to the strengthening of graduate
education in Australia, Canada, Europe, and Japan ðBound, Turner, and Walsh
2009; Freeman 2009Þ. Essentially all of the growth in foreign-born S&E PhDs
has come from low- and middle-income nations. Student flows from middleincome countries expanded first, rising from 6% of new US S&E PhDs in thelate 1960s to 22% by the late 1980s before stabilizing. Low-income countries
expanded next, with their share of new US S&E PhDs rising from 8% in theearly 1980s to over 25% in the early 2000s.8
7

The definitions of income groups are per capita GDP of less than $800 for
low-income countries, between $800 and $8,000 for middle-income countries,
and above $8,000 for high-income countries, where income values are averages forthe period 1985–94 ðsuch that some countries ½e.g., China defined as low-income
during this period are middle-income today, and other countries ½e.g., Korea andTaiwan defined as middle-income are high-income todayÞ. Our income classification mirrors that for the World Bank over the same period.
8
The mid-1990s dip in the share of S&E PhDs awarded to individuals from lowincome countries is due almost entirely to China ðas seen in fig. 2aÞ. Following
the events at Tiananmen Square in 1989, the number of Chinese students going to
the United States for PhD study dropped sharply, leading to a corresponding fall inThis content downloaded from 137.110.33.124 on Wed, 06 Jan 2016 22:32:29 UTC
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Among low-income countries, China and India are by far the largest
sources of PhD students to US universities, as seen in figure 2A. Over theperiod, they account for an average of 84% of students from low-income
nations completing US S&E PhDs. Among middle-income countries, shownin figure 2B, Korea and Taiwan are the largest source countries, accounting for an average of 42% of S&E PhD recipients from this income group.
The next largest middle-income source countries for S&E PhDs are Russia,
Iran, and Turkey.
China and India are large source countries for PhD students in part because they have large populations. Additionally, students from these twocountries exhibit relatively high propensities to pursue PhD education in
the United States. A crude measure of this propensity is the number of
new US S&E PhDs ða flowÞ divided by the birth country’s population
ða stockÞ. New US S&E PhDs per capita reached a peak late in the sample period of 3.0 per 10,000 inhabitants in China and 1.7 per 10,000 inhabitants in India but remained at only 0.6 per 10,000 inhabitants in otherlow-income countries. Korea and especially Taiwan stand out for havingvery high propensities to pursue US S&E PhD training. Over the period,
new US S&E PhDs averaged 13.0 per 10,000 inhabitants in Korea and an
astounding 30.0 per 10,000 inhabitants in Taiwan, nearly as high as the34.0 per 10,000 inhabitants for the United States. Thus, in the 1990s, individuals born in Taiwan were nearly as likely to complete a science and engineering PhD in the United States as were US-born individuals. For comparison, new US S&E PhDs per 10,000 inhabitants averaged 1.5 for othermiddle-income countries and 2.0 in non-US high-income countries ðmany
students from which may pursue advanced training closer to homeÞ.
B. Post-Degree Location Decisions for Foreign PhD Recipients
The SED asks PhD recipients about their post-graduation plans. For ouranalysis, the question of primary interest is: “In which country do you intend to live after graduation ðwithin the next yearÞ?”Figure 3 shows that the majority of foreign-born PhD recipients intend
to stay in the United States, with average affirmative responses of 82% for
those from low-income countries, 58% for those from middle-income coun-the share of PhDs awarded to Chinese students 4–6 years hence. The dip may reflect short-lived restrictions on emigration from China, possibly in response to
the US Chinese Student Protection Act of 1992, under which the United States
granted permanent residence to Chinese immigrants who arrived in the UnitedStates between April of 1989 and June of 1990. The share of S&E PhDs awarded
to Chinese students returned to its pre-1989 peak by the late 1990s and then continued to rise. See Lan ð2011Þ on the consequences of the Chinese Student Protection
Act for US native-born PhDs.

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FIG. 2.—Foreign-born S&E PhDs by birth country. A, Low-income countries;
B, medium-income countries. Low-income countries are defined as those with per
capita GDP less than $800, middle-income countries as those between $800 and$8,000, and high-income countries as those over $8,000; all based on 1985–94 GDP/
capita.

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Grogger/Hanson

FIG. 3.—Share of new foreign-born S&E PhDs. Low-income countries aredefined as those with per capita GDP less than $800, middle-income countries as
those between $800 and $8,000, and high-income countries as those over $8,000; allbased on 1985–94 GDP/capita.

tries, and 57% for those from high-income countries.9 For foreign-bornstudents on a temporary residence visa, staying in the United States pastcompletion of the PhD requires that they obtain employment, such thatthey can transition from a student visa to an employment visa ðe.g., a H-1B
temporary visa for high-skilled workers or an employer-sponsored greencardÞ.10
Figure 3 shows nonmonotonicity in the relationship between the desire to stay and birth country income levels. If high-skilled individuals
choose locations based on the proportional ði.e., MincerianÞ return to skill,as in Borjas ð1987Þ, one would expect the probability of staying in the
United States to be higher for PhDs from other rich countries, where returns to skill tend to be relatively low ðe.g., Hanushek and Zhang 2006Þ.
If individuals instead choose locations based on absolute differences in
9Among S&E PhD recipients born in the United States, the average fraction
planning to stay in the country is 96%.
10
Another option for recent foreign-born graduates of US universities is Optional Practical Training ðOPTÞ, which allows current or former students to workin the United States temporarily ðup to 29 months for S&E degree recipientsÞ aslong as the position is related to the student’s field of study and is approved by
the degree-granting institution and US immigration authorities. OPT is often used
as a transition to an H-1B visa.

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Location Choices of Foreign-Born PhDs in the United States

S13

income between countries, as in Grogger and Hanson ð2011Þ, one would
expect the opposite. What we see in figure 3 is an intermediate outcome,with the probability of staying in the United States being lowest for individuals from middle-income countries. Results in Section III suggest that
this pattern in part reflects middle-income countries having relatively highrates of economic growth ðgiven that the location choices of PhD recipientsare sensitive to recent changes in economic conditionsÞ.
How do we know whether individuals intending to stay in the UnitedStates actually end up doing so? One indication is that at the time of graduation a substantial fraction of new PhDs have already secured employment. Among foreign-born S&E PhDs at graduation, 55% had “signed acontract or made a definite commitment for postdoc or other work,” 10%
were continuing in their predoctoral employment, and 12% were “negotiating with one or more specific organizations.” Only 21% were “seeking
employment but have no specific prospects.” Thus, nearly 80% of the individuals intending to stay in the United States either already had a job orwere in the advanced stages of landing a job.
More concretely, Finn ð2010Þ uses data from the Social Security Administration ðSSAÞ to track the stay rates for individuals in the SED. Using a
confidential version of the SED that includes the individual Social Security
number, he matches groups of these numbers to Social Security income
data to determine whether students in the SED remain in the United States.
Figure 4 plots Finn’s ex post stay rates against intent-to-stay rates based on

FIG. 4.—Stay Rates in SED versus Finn ð2010Þ. Intent-to-stay rate is based on
author’s calculations based on the SED. One-year stay rate is taken from Finn ð2010Þ.

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Grogger/Hanson

intentions reported in the SED, which is an ex ante measure. Althoughintent-to-stay overstates actual stay rates by 4–5 percentage points, thetwo series track each other very closely, with a correlation of 0.85. Finn
ð2010Þ further estimates that stay rates fall little over time, from 71% after
1 year to 65% after 5 years. Thus, the large majority of individuals intending to stay in the United States do indeed stay, and most appear to stayat least 5 years.
Finally, part of the motivation for a recent PhD graduate to stay in the
United States after obtaining his degree may be to secure a postdoctoral
fellowship, which in many fields serves as an apprenticeship necessary forgraduates to succeed in launching independent careers ðStephan, Franconia,
and Scellato 2013Þ. Stephan and Ma ð2005Þ, who also use the SED, document that foreign-born PhD recipients are more likely than the US-born
to take a postdoctoral position out of graduate school. This difference is
explained in part by the relatively strong proclivity of the foreign-bornto obtain degrees in S&E fields, in many of which postdocs predominate
as a post-PhD job choice, particularly in the life sciences, where over 80%
of PhD recipients initially take a postdoc position. Additionally, part of
the attraction of postdocs to foreign-born students may be that they can
extend student visas into short-term work visas with relative ease. Indeed,
Stephan and Ma ð2005Þ find that the higher likelihood of taking a postdoc
holds only for foreign-born students on temporary visas and does not apply to those who are already permanent residents or citizens. We address
the importance of postdocs in the location choice of PhD recipients by
including controls for the field of study and, in later specifications, federal research expenditure by field, which is a key source of funding for hiring postdocs.
C. Location Intentions and Individual Characteristics:
A First Look at Selectivity
Table 1 shows the fraction of S&E PhD recipients intending to stayin the United States broken down by individual characteristics. We havethree characteristics that may be correlated with the academic ability of
the PhD recipient: his/her success in obtaining graduate fellowships or scholarships, the quality of his/her university and of the academic department
awarding his/her PhD degree, and the education level of his/her parents.
The first two characteristics are measured at the time the student begins
graduate school ðwhen most graduate funding decisions are madeÞ.11 The
third is an indication of the student’s family background ðan interpretation that depends on conditioning on average education in the birth coun11

Over the sample period, the primary sources of financial support for students
are university research assistantships or teaching assistantships ð52%Þ, US fellowships or scholarships ð11% of studentsÞ, foreign fellowships or scholarships ð4%Þ,family support or own funds ð11%Þ, and other or unnamed sources of support ð19%Þ.

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Location Choices of Foreign-Born PhDs in the United States

S15

Table 1
Intent to Stay in the United States by Selected Characteristics of Foreign-Born
Science and Engineering PhD Recipients, by Income Level of Home Country
Low Income Middle Income High Income Total
College in United States:
No
Yes
RAship, TAship:No
Yes
Fellowship, scholarship:No
Yes
Fulbright:
No
Yes
Ford, Mellon, Rockefeller, Wilson:
No
Yes
Foreign financial support:
No
Yes
Top 40 university:
No
Yes
Top 10 department:
No
Yes
Father has BA degree:No
Yes
Mother has BA degree:
No
Yes

.874
.853

.598
.697

.554
.724

.710
.744

.782
.924

.478
.732

.491
.674

.582
.818

.871
.892

.602
.635

.567
.631

.709
.744

.873
.769

.605
.478

.574
.571

.712
.580

.873
.576

.605
.135

.574

.712
.338

.880
.283

.639
.245

.595
.238

.737
.247

.875
.871

.587
.625

.563
.580

.717
.707

.871
.902

.598
.663

.565
.612

.710
.725

.836
.910

.560
.665

.551
.607

.664
.769

.851
.926

.581
.687

.560
.619

.684
.793

try, which we do in the regression analysis by controlling for average education in the birth cohort of the student’s parentsÞ.
Table 1 shows that individuals with fellowships, scholarships, RAships,
or TAships are more likely to intend to stay in the United States. We interpret the positive correlation between university financial support andintent to stay in the United States as an indicator of positive selection. S&E
PhD recipients who had foreign fellowships or scholarships are more likely
to return home. The same is true of students with fellowships from theFulbright Program, the Ford Foundation, the Mellon Foundation, theRockefeller Foundation, or the Wilson Foundation.12 Either through explicit
12
While there may be considerable heterogeneity among the criteria used bythese funding sources, we found no significant differences among them in terms ofstay rates and hence include them as a single group.

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S16

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application requirements or implicit selection of candidates, these institutions tend to support foreign students who plan return to the home country
after completing their PhD. Regarding department quality, table 1 shows that
individuals graduating from higher-ranked departments are modestly more
likely to desire to stay in the United States.
A large literature documents intergenerational persistence in schooling, earnings, and other economic outcomes ðe.g., Solon 1999; Black andDevereux 2010Þ. Intergenerational persistence in schooling may reflect
better-educated parents raising their children to value education, passing
along genes that are associated with academic success, or being better able
to provide financially for the higher education of their children. S&E PhD
recipients whose mother or father has a BA degree are more likely to intend
to stay in the United States. These correlations provide further evidence consistent with positive selection of stayers.13
D. Location Intentions and Economic Conditions
Table 2 provides a look at the relationship between intent-to-stay rates,
the income level of the S&E PhD recipient’s home country, and the stateof the business cycle both at home and in the United States. We again divide
countries according to low-, middle-, or high-income status. For each country in the SED, we classified each year in our sample period as falling into aperiod of low, medium, or high growth. Economic growth is defined interms of GDP growth over the 3 years prior to graduation, which we term
lagged GDP growth. Within each country, we then standardized lagged
GDP growth by the within-country standard deviation of lagged GDP
growth. This was done to deal with the substantial heterogeneity acrosscountries in GDP growth volatility. Finally, we classify all years into low-,
medium-, or high-growth periods, depending on whether the standardized
growth rate is below the 25th percentile of the standardized growth distribution, between the 25th and 75th percentiles, or above the 75th percentile.
To account for the state of the US business cycle, we simply classify years
according to quartiles of the lagged US GDP growth rate distribution.14
Table 2 reports stay rates for low-and high-growth periods; stay rates during medium-growth periods generally fell between the two.
13

Parents’ education captures only some of the sources of ability differences between PhD recipients. Yet it may capture differences that matter. Studies show apositive link between a worker’s earnings and the schooling of his/her parents,
even after holding other worker characteristics constant ðLam and Schoeni 1993;
Dearden 1999Þ.
14
In work not reported here, we experimented with these definitions. We defined lagged GDP growth in terms of a 5-year average; we used unstandardized
growth rates to define high and low growth, and we defined high and low growthin terms of peaks and troughs of the business cycle rather than in terms of the distribution of lagged GDP growth. These alternatives generated results similar to thosereported both in table 2 and in the regressions below.

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Location Choices of Foreign-Born PhDs in the United States

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Table 2
Stay Rates for Foreign-Born US Science and Engineering PhD
Recipients by Home Country Income Level and Level of Economic
Growth in the Home Country and the United States
Home Country
Economic Growth

US Economic
GrowthIncome Level ofHome Country

Low

High

Low

High

Low
Medium
High

.816
.647
.604

.853
.613
.609

.848
.552
.558

.887
.648
.600

NOTE.—Economic growth is defined in terms of quartiles of standardized rates of GDP
growth, where standardization is carried out within each country. Low growth pertains to thefirst quartile; high growth pertains to the fourth quartile.

Looking down the columns of table 2 expands on the lesson from figure 2: the stay rate for low-income countries not only exceeds the stay rate
for middle- and high-income counties but does so largely independent of
the state of economic growth either in the home country or the UnitedStates. Comparing the first and second columns, we see that stay rates tend
to be higher when home country growth is higher. The exception is middleincome countries, but for the most part, this is the opposite relationshipfrom what we would expect. The expected relationship shows up quite
strongly when we compare the third and fourth columns. This shows that,regardless of income level, S&E PhD graduates are more likely to stay in
the United States when US GDP growth is high. The relationship is particularly strong for PhD recipients from middle-income countries, who
are almost 15% ðe.g., 8.5 percentage pointsÞ more likely to stay in the UnitedStates during periods of strong economic growth than during periods of
weak economic growth.
III. Results
In the empirical analysis, we estimate a linear probability model of theintent to stay in the United States for S&E PhD recipients who were born
outside of the United States, who attended high school outside the UnitedStates, and who are not US legal permanent residents.15 We limit attention
to graduates who received their PhDs after 1984, by which time the postMao relaxation of emigration controls in China began to result in significant numbers of Chinese students completing PhDs in the United States.
We pool observations across time and include as regressors a dummy forwhether the student received a BA from a US college, the student’s academic
15
In an earlier version of the paper, we reported results for samples that included
foreign-born PhD recipients who had green cards and/or who had attended highschool in the United States. Unsurprisingly, those with stronger US connections are
more likely to intend to stay in the United States.

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S18

Grogger/Hanson

potential ðwhether father has a BA, whether mother has a BA, whether
student received graduate fellowships or scholarshipsÞ, the quality of thestudent’s graduate degree program ðwhether university was ranked in 2003
among the top 40 US universities, whether PhD program was ranked in 1995
by the National Research Council among the top 10 US programs in thefieldÞ, recent economic conditions ðaverage growth in log per capita GDP in
the United States and in the birth country over the previous 3-year period,
average log per capita GDP in the birth country over the previous 4-year
periodÞ, political conditions in the birth country ðaverage Polity IV scorein the previous 3-year periodÞ, demographic controls for the student ðgender, marital status, quadratic in current age, quadratic in age at completion of BA degreeÞ, average education of the parents’ birth cohort for the
student ðfraction of adults in the student’s birth country approximately
25 years older than the student completing primary, secondary, or tertiary
educationÞ, a time trend, dummies for the PhD degree field, and dummies
for the birth country. To save space, we do not report the coefficients forwhether the mother had a BA ðwhich was never significantÞ, the demographic controls, average education of the parents’ birth cohort, the timetrend, or the birth country dummies. Standard errors are clustered by country of birth.
A. Intent to Stay in the United States
Table 3 presents the baseline regression results. The first column includes the full sample spanning the period 1985–2007; the second column
restricts the sample period to the years 1985–2002, for which NSF funding
data are available. The third column restores the full sample period but limits the sample to the top four source countries ðChina, India, Korea, andTaiwanÞ. The fourth column, which we discuss later, limits the sample to
PhD fields that send a relatively high fraction of graduates to work in theprivate sector ðrather than to academics or to governmentÞ. We focus our
discussion for now on results in column 1.
We see that intent to stay in the United States is positively associatedwith having a BA from a US institution. It is also more likely for a graduate whose father has a BA. Because we control for average education in
the parents’ birth cohort, the effect of the father’s educational attainmentis relative to the average in the student’s origin country. Having a father
who has completed college is associated with a 2.2 percentage point higher
desired stay rate. Those intending to stay are thus positively selected interms of parental education.
Additional measures of individual potential include the student’s successin obtaining graduate fellowships or scholarships. Intent to stay is more
likely among students whose primary funding for their doctoral education
was a university research assistantship, a university teaching assistantship,

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Table 3
Regression Results

Sample period
Obtained BA in
United States
Father has BA
RAship/TAship
Fellowship/scholarship
Fulbright
Ford/Rockefeller/
Mellon/Wilson
Foreign scholarship
Top 40 university
Top 10 PhD program
Ranked PhD program
Ranked BA institution
Lagged GDP growth,
United States
Lagged GDP growth,
birth country
Lagged GDP per
capita, birth country
Lagged Polity IV,
birth country

High Schooloutside
United States
ð1Þ

High Schooloutside
United States
ð2Þ

Top FourCountries
ð3Þ

Private Sector
PhD Fields
ð4Þ

1985–2007

1985–2002

1985–2007

1985–2007.056**
ð.014Þ
.022**
ð.006Þ
.098**
ð.019Þ
.053**
ð.014Þ
2.076
ð.046Þ

.049**
ð.014Þ
.025**
ð.007Þ
.091**
ð.018Þ
.042**
ð.013Þ
2.066
ð.046Þ

2.014
ð.010Þ
.019**
ð.003Þ
.077**
ð.004Þ
.066**
ð.005Þ
2.034
ð.092Þ

.043**
ð.015Þ
.017*
ð.007Þ
.099**
ð.026Þ
.044*
ð.022Þ
2.021
ð.118Þ

2.243**
ð.062Þ
2.215**
ð.033Þ
2.001
ð.007Þ
.017**
ð.006Þ
.002
ð.004Þ
.003
ð.005Þ

2.221**
ð.057Þ
2.216**
ð.034Þ
.004
ð.008Þ
.016*
ð.007Þ
.006
ð.005Þ
.013*
ð.006Þ

2.288**
ð.072Þ
2.283**
ð.012Þ
.004
ð.003Þ
.015**
ð.005Þ
.005
ð.003Þ
.014**
ð.004Þ

2.268*
ð.134Þ
2.242**
ð.039Þ
.013
ð.010Þ
.020*
ð.008Þ
.003
ð.004Þ
2.001
ð.008Þ

3.170**
ð.710Þ

3.542**
ð.766Þ

2.917**
ð.122Þ

4.055**
ð.879Þ

2.510**
ð.192Þ

2.543**
ð.197Þ

2.734**
ð.059Þ

2.564**
ð.209Þ

2.138**
ð.023Þ

2.145**
ð.039Þ

2.178**
ð.011Þ

2.131**
ð.023Þ

2.007**
ð.002Þ

2.008**
ð.002Þ

2.015**
ð.001Þ

2.007*
ð.003Þ

.26
126,951.103**
ð.039Þ
.27
87,637.21
78,867.28
48,458

NSF funding,broad field
R2
N

NOTE.—Dependent variable 5 1 if intends to stay, 0 otherwise. In addition to the variables shown, allregressions included a dummy for whether the mother had a BA, a sex dummy, a marital status dummy, age,
age squared, age at BA, age at BA squared, a time trend, the share of the parents’ age cohort with primary,secondary, and tertiary schooling, and dummies for the PhD field. Standard errors, clustered by birth country, are in parentheses.
* p < .05.
** p < .01.

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S20

Grogger/Hanson

a university fellowship, or a scholarship. Having a RAship or TAship
is associated with a 9.8 percentage point higher stay rate, and having afellowship or scholarship is associated with a 5.3 percentage point higher
stay rate. The primary funding alternative to fellowships or scholarships isown funding or family support. Students who succeed in obtaining financial
support from the university or other US sources are thus more likely tointend to stay in the United States than students on restricted funding orfamily funding.
Intent to stay is less likely among students receiving their primary financial support from private foundations, a foreign government, or otherforeign institution. Students with foreign funding are 21.5 percentage points
less likely to desire to stay in the United States, and students with restrictive
support from a US private donor ðFord, Mellon, Rockefeller, or WilsonÞ are
24.3 percentage points less likely to intend to stay.
A further indication of student ability may be the quality of the student’s university and PhD program. However, we find that students fromtop 40 universities are no more or less likely to stay in the United States
than other students. Students from higher-ranked PhD programs are more
likely to desire to stay in the United States, though the correlation is notalways precisely estimated.16 Students graduating from programs ranked
in the top 10 in their field ðin terms of faculty qualityÞ are 1.7 percentage
points more likely to intend to stay in the United States. There is a weak
positive correlation between intent to stay and the quality of a student’s
undergraduate college, although this effect is precisely estimated in only
one regression.
The imprecision of the results for department and university rankings
may be due in part to measurement error. We lack measures of programor university quality that vary by year. For PhD programs, we use National
Research Council rankings from 1995 ðand obtain similar results for NRC
rankings from 2005Þ; for overall university rankings, we use the Academic
Rankings of World Universities from 2003. This means we miss any changes
in the quality of academic departments and universities over time, which
may be especially important for disciplines that are relatively young ðe.g.,
neuroscience, computer engineeringÞ. Our results thus may understate theassociation between program quality and intent to stay.
The remainder of the table reports the effects of economic and politicalconditions on stay rates. The estimates show that intent to stay in the UnitedStates is weaker when per capita GDP growth in the birth country is higher
and that it is stronger when per capita GDP growth in the United States
16
In unreported results, we experimented with other measures of university
ranking, using flexible specifications that included dummies for being in the top 5,
top 10, top 20, etc. In no case did we find that university ranking is significantly
correlated with intent to stay. After controlling for the quality of the PhD program, there is essentially zero correlation between the intent to stay and the overall
ranking of a student’s PhD-granting university.

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Location Choices of Foreign-Born PhDs in the United States

S21

is higher. Thus, business cycle conditions affect PhD recipient location
choices, with students favoring the country with the stronger recent growthrecord.17
Our findings echo Oyer’s ð2008Þ results for MBA graduates. He showsthat the state of the stock market just prior to entering the labor market has enduring effects on the sector in which business graduates work.
We find effects of business cycle conditions on the initial country in whicha PhD graduate intends to reside. Because of persistence in location choices,
the choice of initial country after the degree is likely to matter for a student’s long-run location. Finn ð2010Þ finds that the fraction of those working in the United States 5 years past the PhD ð65%Þ is only 6 percentage
points lower than the fraction working in the United States 1 year past the
PhD ð71%Þ. Business cycles may have lasting as well as short-term effects
on the stock of PhDs.
Although both US and home country economic conditions have significant effects, stay rates are more sensitive to business cycle fluctuationsin the United States than at home. Based on the results in column 2 oftable 3, a one standard deviation increase in the lagged US GDP growthrate ð1.2%Þ is associated with a 3.8 percentage point increase in the intent
to stay; a one standard deviation increase in the ðwithin-countryÞ birth country GDP growth rate ð4.3%Þ is associated with a 2.2 percentage point decrease in the intended stay rate. A US economic boom combined with a birthcountry economic bust could therefore produce a sizable increase in US stay
rates. Such an event occurred in the late 1990s for Korea, as the Asian financial crisis produced a sharp contraction in the country’s GDP while the
US economy grew robustly as part of that decade’s technology boom. In
Section IV, we graphically depict the importance of business cycle swings
for observed variation in stay rates for the four major source countries for
PhD students in the United States ðChina, India, Korea, and TaiwanÞ.
The next row in the table shows a negative correlation between intent
to stay and the recent average level of per capita GDP in the birth country.18 Because the regressions include controls for birth country fixed effects,
this indicates that intent to stay weakens as a country develops. Graduates
are more disposed to stay in the United States earlier in the birth country’s
development process and more disposed to leave the United States later inthe development process. A two standard deviation increase in per capita
GDP ð110 log pointsÞ, which is comparable to the increase in Taiwan’s av17
In the regressions in table 3, we use growth rates averaged over the 3 years prior
to a student’s degree completion ði.e., for 2000 we use growth rates averaged over
1996–97, 1997–98, and 1998–99Þ; results are similar if we use growth rates averaged
over the previous 5 years.
18
With a time trend in the regression, we cannot separately identify the impactof the level of US per capita GDP ðas over the sample period US average income isnearly perfectly predicted by the trendÞ.

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S22

Grogger/Hansonerage income from 1980 to 2000, is associated with a 15 percentage point
decrease in the intended stay rate. One explanation for this finding is thatdeveloped countries have relatively strong demand for R&D labor ðKortum
1997Þ, making the desire to return home increasing in average income. Thispattern is suggestive of a feedback mechanism, in which the number of
S&E PhDs locating in a country positively affects its rate of economic
growth, thereby increasing the attractiveness of the country to PhDs in the
future, which may have further beneficial effects on growth. Such mechanisms are prominent in theories of economic growth that attempt to explain why countries transition from low-growth to high-growth states ðe.g.,
Azariadis and Drazen 1990; Ciccone and Matsuyama 1996; Durlauf andQuah 1999Þ.
Finally, we find that there is a negative association between democracyin the birth country and the desire to stay in the United States. Marshalland Jaggers ð2002Þ measure the authoritarian tendencies of a regime on a
20-point scale, with 210 being perfect dictatorship and 110 being perfectdemocracy. In 2000, Qatar and Saudi Arabia have Polity IV scores of 210,
Liberia and Sierra Leone have scores of 0, and Australia, Canada, New
Zealand, and most of Western Europe have scores of 10. The coefficientestimates in column 1 indicate that a two standard deviation increase in the
Polity IV score ð6.6Þ in the 3 years prior to graduation would be associated with a 4.6 percentage point decrease in the intent to stay in the
United States.19 Democratic openings thus appear to induce recently minted
PhDs to return to their countries of origin. While existing research documents the impact of political upheaval on foreign student flows ðe.g., Stuen,
Mobarak, and Maskus 2010Þ, we are not aware of research on the impactsof democratic transitions on return migration.
Column 2 of table 3 reports estimates from a regression that include
annual NSF funding by field, which is only available through 2002 ðNational
Science Foundation 2004Þ. Higher NSF funding is positively correlated with
the intent to stay in the United States; a one standard deviation increase
in NSF funding ð0.78Þ is associated with a 7.8 percentage point increase inrecent S&E PhDs’ intention to stay. At the same time, adding NSF funding to the model has little effect on the other regression coefficients. For
this reason, we employ data from the full sample period for the remainderof the estimates in tables 3–5.
Column 3 restricts the sample to the four largest sending countries,
China, India, Korea, and Taiwan, which together account for 62% offoreign-born US S&E PhDs over the period 1985–2007. Many of the19

For comparison, Korea experienced an 11 point change in its Polity IV score
during the democratization process that occurred in the country between 1986 and1989.

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Location Choices of Foreign-Born PhDs in the United States

S23

coefficients are similar to those obtained from the full sample. The exceptions mostly involve political and economic conditions. Students fromthe top four sending countries are slightly less sensitive to US economic
growth, slightly more sensitive to home country economic growth, andmore sensitive to the home country political situation than their counterparts from other countries.
B. Variation across Academic Disciplines
within and outside of S&E
So far, we have pooled data across S&E fields. We have also ignored disciplines outside of science and engineering. In table 4, we estimate regressions similar to those in column 1 of table 3 separately for seven disciplinary
categories. Three are S&E fields, including physical sciences ðatmospheric,
earth, and ocean sciences; chemistry; mathematics and computer science; astronomy and physicsÞ, life sciences ðagricultural science, biological sciences,
health sciencesÞ, and engineering, and four are non-S&E fields, including
economics ðfinance, accounting, marketing, management strategy, organizational behaviorÞ, social sciences ðexcept economicsÞ, humanities ðincluding
communications and lawÞ, and education.
The results in table 4 are roughly similar across the three S&E fields.
Among non-S&E fields, the estimates for economics and social sciences
most closely resemble those for science and engineering. Differences between fields emerge when we examine correlates of academic potential. In
the S&E fields, as well as economics and social science, the father’s education
coefficient is positive and significant. In humanities and education, it issmall and imprecisely estimated. Coefficient estimates in all fields are similar for having a RAship/TAship, but not for having a fellowship or scholarship. The positive selection that we observe among foreign S&E graduates
is weaker for graduates in social science, humanities, and education.
We also see some differences across fields in students’ responsiveness toeconomic conditions. For the S&E fields, economics, and social science,
US GDP growth, home country GDP growth, and the level of home country GDP all have significant effects in the expected direction. In humanities
and education, by contrast, those coefficients tend to be substantially smallerand several are insignificant.
It is intriguing in table 4 that the two fields with the largest coefficientson lagged US GDP growth—engineering and economics—are ones with relatively strong ties to the private sector. Does the degree of integration between a PhD field and the private sector job market matter for the impact
of business cycle conditions on graduate location intentions? In column 4of table 3 we investigate this issue. To categorize the private-sector orientation of PhD fields, we examine the fraction of US-born PhD graduates whoplan to take private sector jobs ðdefined as jobs in a for-profit industry orThis content downloaded from 137.110.33.124 on Wed, 06 Jan 2016 22:32:29 UTC
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S24

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Top 40 university

Foreign scholarship

Ford/Rockefeller/Mellon/Wilson

Fulbright

Fellowship/scholarship

RAship/TAship

Father has BA

Obtained BA in United States

Variable

Table 4
Regression Results by Field of PhD.044**
ð.013Þ
.016*
ð.007Þ
.083**
ð.015Þ
.051**
ð.012Þ
2.197*
ð.084Þ
2.298**
ð.023Þ
2.170**
ð.032Þ
2.002
ð.007Þ

Physical Science.059**
ð.018Þ
.028**
ð.006Þ
.130**
ð.020Þ
.090**
ð.017Þ
2.020
ð.132Þ
2.215**
ð.080Þ
2.159**
ð.023Þ
2.017**
ð.006Þ

Life Science.053**
ð.017Þ
.017**
ð.006Þ
.128**
ð.018Þ
.076**
ð.017Þ
2.045
ð.093Þ
2.557**
ð.126Þ
2.227**
ð.039Þ
.004
ð.008ÞEngineering.108**
ð.019Þ
.020*
ð.009Þ
.112**
ð.016Þ
.071**
ð.013Þ
2.487**
ð.160Þ
2.346**
ð.060Þ
2.118**
ð.019Þ
2.026*
ð.010Þ

Economics.120**
ð.024Þ
.017*
ð.007Þ
.114**
ð.015Þ
2.009
ð.014Þ
2.389**
ð.049Þ
2.089
ð.049Þ
2.142**
ð.025Þ
2.015
ð.010Þ

Social Science.125**
ð.018Þ
2.003
ð.009Þ
.145**
ð.017Þ
.008
ð.016Þ
.226
ð.197Þ
2.117
ð.122Þ
2.120**
ð.022Þ
.015
ð.010Þ

Humanities.078**
ð.025Þ
.008
ð.009Þ
.162**
ð.019Þ
2.044
ð.027Þ
2.074
ð.164Þ
2.204**
ð.045Þ
2.094**
ð.032Þ
2.014
ð.009Þ

Education

S25

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All use subject to JSTOR Terms and Conditions.017*
ð.006Þ
.005
ð.005Þ
.006
ð.013Þ
1.473**
ð.318Þ
2.327**
ð.124Þ
2.120**
ð.037Þ
2.008*
ð.003Þ
.19
51,256

Life Science.012
ð.009Þ
.004
ð.006Þ
.000
ð.013Þ
2.412**
ð.400Þ
2.634**
ð.174Þ
2.127*
ð.049Þ
2.008*
ð.003Þ
.25
62,748

PhysicalScience
2.002
ð.013Þ
.061**
ð.015Þ
.004
ð.009Þ
1.080**
ð.303Þ
2.270
ð.146Þ
2.162**
ð.030Þ
2.003
ð.002Þ
.34
40,791.083**
ð.015Þ
2.074**
ð.022Þ
2.025*
ð.010Þ
1.744**
ð.439Þ
2.380*
ð.192Þ
2.179**
ð.047Þ
2.008*
ð.003Þ
.20
19,613Engineering
2.018
ð.014Þ
.013
ð.010Þ
2.016
ð.019Þ
2.073**
ð.315Þ
2.492*
ð.242Þ
2.109*
ð.048Þ
2.007*
ð.003Þ
.17
15,492

Economics.055**
ð.015Þ
2.015
ð.018Þ
2.004
ð.017Þ
.971*
ð.371Þ
2.408
ð.217Þ
2.049
ð.040Þ
2.007**
ð.003Þ
.17
13,895SocialScience

2.037
ð.019Þ
.544
ð.303Þ
2.337*
ð.146Þ
2.136
ð.077Þ
2.009*
ð.005Þ
.19
11,050

Humanities

NOTE.—Dependent variable 51 if intends to stay, 0 otherwise. In addition to the variables shown, all regressions included a dummy for whether the mother had a BA, a sex
dummy, a marital status dummy, age, age squared, age at BA, age at BA squared, a time trend, the share of the parents’ age cohort with primary, secondary, and tertiary schooling.
Sample is high school outside the United States. Sample years are 1985–2002. Standard errors, clustered by birth country, are in parentheses.
* p < .05.
** p < .01.

R2
N

Lagged Polity IV, birth country

Lagged GDP per capita, birth country

Lagged GDP growth, birth country

Lagged GDP growth, United States

Ranked BA institution

Ranked PhD program

Top 10 PhD program

Variable

S26

Grogger/Hanson

businessÞ upon graduation. We choose US-born graduates for the classification in order to avoid having the language, culture, or visa issues that may
affect immigrant job search play a role in defining the private-sector orientation of a PhD field.
Across all fields since 1984, 9.3% of US-born PhDs plan to work in afor-profit business upon graduation. The shares are highest in engineering ð50.5% in plastics engineering, 44.6% in ceramics sciences engineering, 41.3% in metallurgical engineeringÞ and in parts of the physical andlife sciences ðpolymer chemistry 42.3%, forestry science 40.0%, food science 33.8%Þ. Overall, engineering accounts for 15 of the top 25 PhD fields
in terms of private-sector orientation ðthere are 313 total fieldsÞ. The least
private sector–oriented S&E fields tend to be biological sciences that study
entire organisms ðevolutionary biology at 0.8%, anatomy at 1.0%, plant pathology at 1.2%, and zoology at 1.4%Þ.
Turning back to table 3, column 4 restricts the sample to the subset
of S&E graduates from column 1 who earned PhDs in the fields that have
above-median shares of private-sector orientation. Comparing columns 1
and 4 of table 3, we see that the coefficient on lagged US GDP growth isalmost one-third larger for private sector–oriented fields than for all fields.
Results are similar when we define private sector orientation of a field to be
above the mean or in the top tercile. It thus appears that foreign PhD stay
rates are more sensitive to the US business cycle in fields that are moreoriented toward the private sector in terms of PhD employment. Coefficients differ little across fields for birth country GDP growth or per capita
GDP.
C. Robustness Checks
One concern about our regression models arises because economic conditions may not only influence S&E graduates’ decisions to stay in the
United States when they complete their PhD but also influence their decisions to seek graduate training here in the first place. If, in addition, economic
conditions are temporally correlated, then our estimates in table 3 may reflect not only how economic circumstances influence S&E PhD recipients’completion-year intentions to stay in the United States but also part of theirrationale for first entering the United States. To deal with this issue, we
return to our main sample of S&E PhD recipients, expanding the model incolumn 1 of table 3 by adding measures of US and home country economic
conditions at the time the student began PhD study. Under the concerns
described above, this should reduce in absolute value the estimated effectsof completion-year economic conditions.
Expanding the model this way requires us to limit the sample period
to 1992–2007, since the year in which the student began PhD study does
not appear in the SED before 1992. The regression in column 1 of table 5
reestimates the model reported in column 1 of table 3 over this shorter pe-

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Location Choices of Foreign-Born PhDs in the United States

S27

Table 5Regression Results with Additional Business Cycle and Political Controls
Variable
Lagged GDP growth, United States
Lagged GDP growth, birth country
Lagged GDP per capita, birth country
Lagged polity IV, birth country
Lagged GDP growth, United Statesðyear of PhD entryÞ
Lagged GDP growth, birth countryðyear of PhD entryÞ
Lagged GDP per capita, birth countryðyear of PhD entryÞ
Lagged Polity IV, birth countryðyear of PhD entryÞ
Time to completion

ð1Þ

ð2Þ

2.041**
ð.365Þ
2.743**
ð.189Þ
2.152**
ð.038Þ
.005*
ð.002Þ

ð3Þ

ð4Þ

2.043**
ð.322Þ
2.835**
ð.183Þ
2.111
ð.064Þ
.005*
ð.002Þ

2.059**
ð.351Þ
2.739**
ð.188Þ
2.155**
ð.037Þ
.005*
ð.002Þ

2.705
ð.415Þ

.018
ð.178Þ

2.227
ð.128Þ

2.248**
ð.088Þ

2.074**
ð.026Þ

2.042
ð.042Þ

.007*
ð.003Þ

2.000
ð.003Þ
.010**
ð.003Þ

NOTE.—For all columns, N 5 88,859, R2 5 .27. Dependent variable 51 if intends to stay, 0 otherwise.
In addition to the variables shown, all regressions included all variables shown in table 3, plus a dummy
for whether the mother had a BA, a sex dummy, a marital status dummy, age, age squared, age at BA, age
at BA squared, a time trend, the share of the parents’ age cohort with primary, secondary, and tertiary
schooling, and dummies for the PhD field. Sample is high school outside the United States. Sample years
are 1992–2007. Standard errors, clustered by birth country, are in parentheses.
* p < .05.
** p < .01.

riod. The regressors in the two models are identical, though in table 5 wereport only the coefficients involving economic and political conditions inorder to save space.
The coefficients differ somewhat between the full and the short sample
periods. The coefficient on US GDP growth is smaller in table 5 than intable 3, although the coefficient on home country GDP growth is larger
in the shorter sample than in the full sample. The coefficients on the levelof home country GDP are similar in the two sample periods. The biggest
change involves the Polity IV coefficient, which changes sign from negative to positive.20
20

In unreported results, we explored whether the switch in sign was a functionof the different types of regime changes that took place during the 1980s versus
the 1990s. In the 1980s, regime change was concentrated in Latin America andEast Asia, where governments tended to change from authoritarian regimes under
military control to democratically elected civilian regimes. In the 1990s, in contrast,

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In column 2 of table 5, we replace the completion-year measures with
their entry-year counterparts. These are measured as 3-year lags of economic and political conditions, but they are dated from the year the student began the PhD rather than the year he or she completed it. US GDP
growth now has the wrong sign, and both it and home country GDP
growth have insignificant coefficients. Only the level of home country
GDP is significant, and its coefficient is about half the magnitude of its
completion-year counterpart in column 1.21
Both sets of variables are included in the model reported in column 3of table 5. The coefficients on the completion year variables are generally
similar to those reported in column 1. The main change is that the coefficient on home country per capita GDP is no longer significant. Of thefour variables reflecting entry-year economic and political conditions, only
one is significant. We conclude that the completion-year measures are notmerely picking up the effects of entry-year conditions on students’ decisions
to begin US graduate study.
It is possible that including economic conditions at time of PhD entry
does not entirely purge the estimation of correlation between intent tostay and choices over when to start and when to complete the PhD. As afurther robustness check, we add time to PhD completion ðthe difference
between reported year of entry for PhD study and year of PhD degreeÞ asa regressor, recognizing obvious concerns over the potential endogeneityof this variable to unobserved factors related to the intent to stay in the
United States. Time to complete the PhD appears in column 4 of table 5.
While it is statistically significant—and positive, thus indicating that thosetaking longer to complete their PhDs are more likely to intend to stay in
the United States—the inclusion of the variable has virtually no impact on
our other coefficient estimates ðeither those reported in table 5 or theother regressors that are unreportedÞ. We therefore conclude that while
the timing of PhD completion may be a worthy issue in its own right, its
interaction with the decision of whether to stay in the United States does
not appear to affect inference on the economic variables of interest.22
A related concern is that our estimates of completion-year GDP growthor per capita GDP may not reflect the true impact of these variables but
regime change was concentrated in Eastern and Central Europe, which were undergoing the transition from communism to more open societies. We included aninteraction between the Polity IV variable and a dummy for whether the country
was communist at any time after 1950. The interaction was insignificant, suggesting that the above explanation does not apply.
21
Taken together, entry-year economic conditions in col. 2 are jointly statistically significant ðwith an F-statistic of 5.33Þ. In col. 3, they are also jointly significant ðF-statistic of 4.99Þ.
22
In unreported regressions, we performed a further robustness check in which
we included economic conditions in the estimation based not on the actual year of
PhD completion but based on the projected year of PhD completion ðwhere weThis content downloaded from 137.110.33.124 on Wed, 06 Jan 2016 22:32:29 UTC
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rather the impact of some omitted variable that is correlated with these
regressors. In unreported results, we examined the robustness of our results to the inclusion of additional variables that capture economic conditions in the birth country. To see if stay rates were a function of specificaspects of economic development rather than simply average income, we
included measures of economic openness ðexports plus imports over GDP,
inward foreign direct investment over GDPÞ, technological sophisticationðcellphone subscriptions per capitaÞ, or industrial sophistication ðshare ofmanufacturing in GDPÞ. In each case, we defined these variables as theaverage over lagged values in the previous three periods. Adding these variables had no impact on the coefficient estimates for birth country GDP
growth or per capita GDP. Furthermore, none of these variables, except
for the manufacturing share of GDP, was precisely estimated.
Another possibility is that results are being driven by strengthening economic linkages between the United States and the birth country, which may
contribute to economic development or expand job prospects abroad for
US-trained PhDs. Over the sample period, there is a dramatic expansion inforeign activities by US multinationals, with employment in the foreign affiliates of US parent firms increasing by 68% between 1983 and 2007. We
included measures of the presence of US multinational enterprises in thebirth country ðdefined to be the level or change in employment in foreign
affiliates owned by US multinationals in the 3 years previous to a student’s
graduationÞ. These variables are neither economically nor statistically significant.
As further robustness checks, we controlled for nonlinear time trends,
replaced our measure of GDP growth with H-P filtered GDP growth, included lagged sector-specific GDP growth in the United States ðfor agriculture, construction, government, manufacturing, retail and wholesale trade,and servicesÞ, included lagged Gini coefficients for the birth country, andallowed for interactions between our ability measures ðfather’s education,
having an RAship or TAshipÞ and business cycle conditions in the UnitedStates or the birth country. The additional variables were generally insignificant and did not materially change the main results reported in table 3.
IV. Economic Conditions and Location Intentions for PhD
Graduates from China, India, Korea, and Taiwan
To consider the importance of economic conditions for PhD recipients’intentions to stay in the United States, we provide a graphical depictionin this section of the link between lagged GDP growth and S&E PhD recipients’ stay rates. For reasons of space we restrict attention to the four
predicted year of PhD completion based on economic conditions at entry into
PhD training and other controls included in table 3Þ. This exercise yielded results
substantially similar to those we report in tables 3 and 4 ðthough with somewhat
larger standard errors on the Polity IV variableÞ.

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Grogger/Hanson

largest sending countries: China, India, Korea, and Taiwan. For the sake ofsymmetry, we separately depict the link between stay rates and political conditions as well.
For each country in figure 5, we plot three lines over time: the actual
stay rate, the predicted stay rate from the model in column 3 of table 3, andthe simulated stay rate. The simulated stay rate is the predicted value fromcolumn 3 of table 3 in which we have replaced both lagged home country
GDP growth and lagged US GDP growth with their country-specific meanvalues over the sample period. Comparing predicted and simulated stay
rates provides a depiction of how business cycle conditions affect the shareof S&E PhD recipients who remain in the United States after graduating.23
If we first compare actual and predicted stay rates, depicted as dashed andunmarked solid lines, respectively, we see that the model captures the timeseries variation in stay rates, particularly since we do not include variables
used to improve a model’s time-series fit, such as lagged dependent variables or high-order polynomials in time.
Now comparing predicted and simulated stay rates, we see that businesscycles differ in their importance in different sending countries. In China andIndia, stay rates are high. In the case of China, the model overpredicts sensitivity to the business cycle. However, the decline in stay rates at the endof the sample period ðwhen the model tracks the actual data fairly wellÞ may
represent the shape of things to come, considering China’s rapid recent
growth in real per capita GDP. In the case of India, figure 5 shows that almost all of the variation in the actual stay rate over time can be attributed
to the business cycle.
In Korea and Taiwan, the difference between the predicted and simulated stay rates shows that the US recession of the early 1990s had a pronounced effect on location intentions, reducing stay rates among Koreansby roughly 8 percentage points ðin 1993Þ and among Taiwanese by nearly
10 percentage points.24 The Asian financial crisis, which began in 1997, thenled to a steep rise in the share of S&E graduates seeking to stay in the UnitedStates. In the case of Korea, the country’s GDP initially plunged, falling
by 7% from 1997 to 1998, but then it recovered quickly with growth rates
above 4% in each of the following 6 years. The pattern in Taiwan is quite
similar to that in Korea, reflecting common region-wide movements in
23
Preliminary analyses not reported here indicated that more of the businesscycle effect was due to variation in US GDP growth than to variation in homecountry GDP growth. This is consistent with our finding above that stay rates
were generally more strongly affected by US GDP growth than by home country
GDP growth.
24
Kim ð2010Þ notes that the supply of PhDs in Korea rose sharply after about
1990. He shows that the number of Koreans earning PhDs rose around that time,
but fig. 5 makes clear that part of the increase in supply also stemmed from thedecline in the rate at which US-educated Korean-born PhDs remained in the
United States.

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FIG. 5.—Simulated effects of business cycle on stay rates for four largest sending countries. Dashed lines: actual intent-to-stay rates arefrom SED; solid lines: predicted intent-to-stay rates based on regression estimates reported in table 3, column 3; lines with plotting symbols:
predicted intent-to-stay rates based on regression estimates reported in table 3, column 3, but with lagged GDP and lagged GDP growthheld constant at country-specific mean. All are authors’ calculations.

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GDP during the Asian financial crisis. The fact that simulated stay rates
are flatter than predicted stay rates after the Asian financial crisis indicatesthat both Korea- and Taiwan-born S&E PhDs were responsive to changes
in home country GDP growth.
We checked whether other measures capture the link between economic
conditions and stay rates. However, after considerable experimentation,
we did not find alternative measures that performed better than lagged
GDP growth. With lagged GDP growth in the regression, measures ofrecent birth country financial, banking, or currency crises from Reinhardt
and Rogoff ð2008bÞ or “sudden stops” in capital inflows from abroad from
Reinhardt and Rogoff ð2008aÞ were statistically insignificant in nearly allcases. Lagged growth rates are the strongest and most robust economic
predictors of the location choices for foreign-born PhDs.
Figure 6 depicts the role of political conditions, as captured by the Polity
IV index. Each panel in figure 6 plots three lines: the actual stay rate, thepredicted stay rate from the model in column 2 of table 3, and a simulated
stay rate. The actual and predicted stay rates are exactly the same as thosepresented in figure 5. In figure 6, the simulated stay rate is the predictedvalue from the regression in column 2 of table 3 after replacing the actual
Polity IV index by its country-specific mean over the sample period.
Since the Polity IV index was constant for China over the sample period and was nearly constant for India, political conditions had nothing to
do with variation in stay rates in those countries. The same is not true for
Korea or Taiwan. Korea transitioned from military rule to democracy in
1988; Taiwan’s process of democratization has been more gradual, beginning with a slow shift away from authoritarian rule in the late 1980s andculminating with direct presidential elections in 1996. Korea’s abrupt political opening explains a sizable share of the decline in its S&E PhDs intentions to remain in the United States during the late 1980s. Whereas
Korea’s simulated stay rate was 15 percentage points below the actual stayrate in 1985, by 1991 the two series coincided. Political conditions also help
explain why the stay rate of Taiwanese S&E PhDs fell in the late 1980s andearly 1990s.
V. Final Discussion
If innovation is the key to sustaining positive rates of long-run economic
growth, highly skilled labor with training in science and engineering is the
input that makes innovation and therefore growth possible. Graduates in
S&E fields have relatively high propensities to produce and to commercialize patents, and the stars among these graduates have relatively high propensities to launch high-technology business ventures. Over the last half century,
the United States has been the most important training ground for the global
supply of science and engineering talent. Where S&E PhDs choose to locate
after they have completed their education is likely to affect the global distribution of innovative capacity.

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FIG. 6.—Simulated effects of political conditions on stay rates for four largest sending countries. Dashed lines: actual intent-to-stay rates
are from SED; solid lines: predicted intent-to-stay rates based on regression estimates reported in table 3, column 3; lines with plotting
symbols: predicted intent-to-stay rates based on regression estimates reported in table 3, column 3, but with lagged Polity IV scores held
constant at country-specific mean. All are authors’ calculations.

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We find that S&E PhDs with the strongest academic potential, measured in terms of their attributes and performance at the time they enter
graduate school, are those most intent on staying in the United States.
These results are consistent with a growing body of evidence that finds positive selection in emigration from low-income countries ðe.g., Grogger andHanson 2011Þ. The United States tends to succeed in luring the best andbrightest foreign students it has attracted to study in the country to stay in
the United States after their degrees are completed. We know less about
the long-run location choices of these individuals in terms of how manyend up remaining in the United States as permanent residents or becoming citizens. However, if productivity is high early in researchers’ careersðLehman 1953; Simonton 1991Þ, even short-term location intentions may
have important economic consequences.
Economic conditions are among the most important factors shaping thelocation intentions of recent PhD recipients in S&E fields. A stronger US
economy makes it more likely that graduates will intend to stay in the
United States. A weaker economy in the graduate’s home country has thesame effect. The responsiveness of PhD location intentions to businesscycle conditions may create a link between the volatility of output and cycles
in long-run economic growth. More short-run volatility appears to produce greater fluctuations in the supply of highly skilled labor, possibly contributing to variation in long-run growth rates.
Business cycle considerations aside, we do see that as countries develop
they become more attractive locations for PhDs in science and engineering. There is obvious potential for a virtuous cycle in education and innovation, with returning S&E PhDs increasing innovation in the home country,
thereby enhancing prospects for economic growth and raising the attractiveness of the home country as a location for future PhD recipients. Korea
and Taiwan are possible examples of self-reinforcing processes. They also
provide examples of the powerful role that democratization can play in encouraging highly skilled workers to return home.
Appendix
Table A1
Summary Statistics for Main Estimation SampleðTable 3, Column 2Þ
Variable

Mean

Stay in United States
Obtained BA in United States
Father has BA
Mother has BA
RAship/TAship
Fellowship/scholarship
Fulbright fellowship
Ford/Mellon/Rockefeller/Wilson

.737
.051
.503
.308
.650
.108
.001
.001

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S35

Table A1 (Continued)
Variable
Foreign scholarship
Top 40 university
Top 10 PhD program
Ranked PhD program
Ranked BA institution
Male
MarriedAge
Age at BA
Share of parents’ age cohort with tertiary education
Share of parents’ age cohort with secondary education
Share of parents’ age cohort with primary education
Lagged GDP growth, United States
Lagged GDP growth, birth country
Lagged GDP per capita, birth country
Lagged polity IV, birth country
N

Mean
.065
.452
.104
.590
.594
.792
.617
32.25
22.67
4.89
ð4.98Þ
10.55
ð9.92Þ
22.55
ð12.77Þ
.026
ð.011Þ
.060
ð.038Þ
7.772
ð1.42Þ
1.991
ð7.18Þ
126,951

NOTE.—Authors’ calculations based on SED, 1985–2007. For continuous
variables, standard deviations are in parentheses.

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