No. 2020001                                                                     

May 2020

Gaurav Khanna, Kevin Shih, Ariel Weinberge, Mingzhi Xu and Miaojie Yu

Abstract

We investigate whether trade liberalization encourages Chinese student enrollment in US universities. We focus on China’s accession to the World Trade Organization and show that Chinese cities that were more exposed to this trade liberalization episode sent more students to US universities. The results indicate that growth in housing income/wealth was an important channel that allowed many Chinese families to afford US tuition, consistent with large growth in the share of Chinese students who financed their studies primarily from personal funds. Other potential mechanisms, such as changing returns to education or information flows, appear to play less of a role. We also inform distributional consequences for the United States. Trade liberalization induced increases in the shares of Chinese students studying fields other than science, technology, engineering, and mathematics at the bachelor’s level and attending less selective US universities. Student inflows were similar in areas with low and high levels of human capital in the United States, indicating that educational exports do not exacerbate regional inequality. An important conclusion of our work is that the trade deficit in goods partially cycles back as a surplus in education exports to China.

Keywords: International Students, Trade Liberalization, China, Migration

JEL： F16, I25, J24, J61

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    Trade Liberalization and Chinese Students in US Higher Education.pdf