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A first-of-its kind analysis of aggregate transition rates from college to work among three groups of foreign-born college students indicates that only one group—lawful permanent residents (LPR)— are fully transitioning to work in local economies. Undocumented college students are 20 to 30 percentage points less likely than their LPR peers to find local work after graduation. Aggregate transition rates for F-1 visa holders were close to zero. Policies that increase work opportunities for F-1 visa holders and undocumented students to the same levels as their LPR peers would increase employment levels and tax revenues in nearly every state in the country.
The United States College and University system is schooling an increasing number of students from all over the world. For a very large portion of those, namely those on F1 visas and those with no documentation, the transition to the US labor market can be very difficult, if not impossible. This results in re-migration or under-employment of these highly skilled workers. We quantify the size of these populations and the employment and wage losses to US states and local economies from the constraints imposed by immigration status on those students. We suggest that some recent policies that have increased legal access to jobs for these two categories, such as the extension of optional practical training (OPT) in 2008 and the temporary status granted by DACA to undocumented college educated in 2012 may have increased their college to local jobs transition rates. There is scope for larger gains when adopting policies that would substantially increase the labor perspectives in the US of F1 and undocumented college students. We suggest some local policies that could prove to be innovative ways to strengthen local economies and link immigration policies to local economic incentives.