U.S. Innovation Hurt by Restrictions on Foreign Grad Students, Study Shows

Tight restrictions on student visas for foreign graduate students will hasten the erosion of America's global dominance in innovation, according to a University of Colorado at Boulder study.

The study, conducted by Economics Professor Keith Maskus and Gnanaraj Chellaraj and Aaditya Mattoo of the World Bank, provides economic results about the contributions of foreign graduate students and skilled immigrants to U.S. innovation and technological change.

The study finds that strict enforcement of restrictions on student visas could deteriorate much of the innovative activity sparked by the Bayh-Dole Act of 1980, which allows U.S. universities to commercialize research results. Fewer foreign graduate students have entered U.S. universities since 9-11, based on recent survey data, the study observes.

A 10 percent increase in the number of foreign graduate students in the U.S., however, would raise patent applications by 3.3 percent, according to the researchers. With such an increase, they say, patents granted to universities also would go up by 6 percent, while non-university patent grants would go up by 4 percent.

Annual licensing revenue from U.S. patents amounts to tens of billions of dollars, with pharmaceutical, biotechnology and informational technology industries among the leaders.

The study also finds that U.S.-born graduate students have no detectable effect on patent applications or grants. Maskus explained that this is largely due to the fact American-born students tend to study other areas outside of the sciences and engineering, two leading areas in innovation.

"There is still a much higher return for American students to learn to run a company or become lawyers," Maskus said.

The U.S. presently enjoys an advantage in exporting the services of higher education, especially in training scientists and engineers, Maskus says. As countries such as China and India improve their graduate science programs, he concludes, visa restrictions could put U.S. institutions at a competitive disadvantage.

Maskus and his colleagues developed a model using U.S. Census Bureau and National Science Foundation data to test the productivity of graduate students and skilled workers, both domestic and foreign, in producing patent awards to university and private businesses. To obtain a copy of the study, contact Keith Maskus at keith.maskus@colorado.edu or 1-303-492-7588.