The positive economic impact of retaining these international, U.S.-trained STEM graduates is significant. Even while still in training, each foreign-born STEM worker and PhD student contributes between $12,225 to $13,568 to the U.S. GDP annually, highlighting their direct value to the U.S. economy. Once they enter the workforce, the value becomes even greater: in 2019, the post-graduate STEM workforce collectively contributed up to $409 billion in labor value-added, a whopping 1.9 percent of U.S. GDP.
However, this influx of global talent is increasingly met with immigration challenges. As a result, many STEM graduates are leaving the U.S. after completing their studies.
Despite the U.S. boasting a world-class innovation ecosystem supported by top universities, nearly 51 percent of international master’s graduates and 76 percent of PhDs leave the U.S. after finishing their studies. An increasing number of science and engineering graduates are temporary visa holders, and a 2021 survey by FWD.us found that 73 percent of prospective international students would stay in the U.S. if visas were more readily available. Notably, around 60 percent of U.S.-trained international AI PhDs have cited visa issues as a primary reason for leaving.
This exodus reflects considerable economic sunk and opportunity costs. Training a STEM PhD student is expensive investment, with estimates for training an electrical engineering student reaching $650,000 over five years. Despite these significant investments, restrictive immigration policies are forcing talent to leave after being trained in the U.S. vitiating the opportunity for them to stay and contribute to the U.S. economy.
Rising Global Competition for Talent
Countries around the world increasingly recognize the economic and strategic value of attracting and retaining STEM talent from abroad, and many are adopting proactive policies to do so. To attract more international undergraduate, master’s, and doctoral students, many countries offer scholarships and facilitate study permit approval. These policies are having an impact. For example, in 2017, Australia saw a 15 percent increase in international higher education enrollments, while Germany reached its target of enrolling 350,000 international students three years ahead of schedule.
To retain these international STEM graduates, many countries are also expanding work visas and creating clearer pathways to permanent residency. For example, Germany uses the EU Blue Card to capture talent in sectors with skill shortages, such as IT, engineering and healthcare, while China enables graduates from universities to obtain easier work visa applications if they work in specific fields or geographic zones.
Canada’s Global Skills Strategy offers fast-tracked work permits for highly skilled workers, with processing times as quick as two weeks, while its Express Entry visa grants highly skilled foreign talent the chance to gain permanent residency. Canada particularly targets U.S.-educated international students struggling to secure visas in the United States, marketing its “Path to Canada” policy as an “opportunity for foreign-born U.S. graduates to achieve their career goals without the uncertainty of the U.S. visa system.” Indeed, analysis by the Niskanen Center reveals that roughly 45,000 U.S.-educated international students left the United States to take jobs in Canada from 2017 to 2021.
Strengthening Pathways for STEM Immigration
Currently, China and India are the global leaders in producing STEM graduates: in 2020, China graduated 3.57 million STEM students, while India followed with 2.55 million. The U.S. came in third at 820,000 graduates. While the United States remains the top destination for international students, a factor that has historically helped the country maintain a competitive edge, this advantage is increasingly at risk if U.S. STEM graduates are not retained in the newly competitive global market for high skills. To maintain leadership in technology and innovation, it is crucial for the United States to retain international STEM graduates.
It is critical, therefore, that U.S. policymakers take urgent action to address the challenges of STEM immigration. In this regard, the National Academy of Sciences has long recommended increasing the number of employment-based green cards and eliminating per-country caps on high-skilled immigrant visas. Addressing these issues through policy reform now is essential to ensure that the U.S. grows the skill base to remain a leader in the global innovation race.
