BRAIN FREEZE: The economic costs of restricting international STEM students

Long-term economic scenarios

The paper considers two plausible and generally conservative scenarios. In the first, a sustained one-third decline in foreign STEM graduates from U.S. institutions transitioning into the U.S. workforce could result either from the combined deterrent effects of multiple policy changes or from rescinding OPT alone. The authors estimate that such a decline would reduce the overall STEM workforce by around 6 percent, with losses exceeding 11 percent among Ph.D.-level workers. These reductions would weaken the nation's innovative capacity and, through well-documented productivity effects, reduce long-term GDP growth, with resulting long-run GDP losses estimated at $240 to $481 billion annually within ten years.

The second scenario examines a one-tenth decline in foreign STEM graduates entering the U.S. workforce, reflecting the potential impact of individual policy changes such as eliminating duration of status admissions or restricting H-1B visas. If only one of the proposed restrictions were implemented and the number of U.S.-trained high-skill foreign STEM workers contributing to the U.S. economy declined by around one-tenth, the corresponding long-run GDP losses within ten years are estimated at $72 to $145 billion annually. Even under this more moderate scenario, the economic consequences would be substantial.

No easy substitution effects

The available evidence suggests that these losses would not be quickly offset by increased participation from U.S.-born workers or foreign-trained workers abroad. Instead, restricting the pipeline of U.S.-trained international graduates would erode America's comparative advantage in innovation, weaken regional technology clusters, and slow entrepreneurial activity. According to the best available economic research, international education is the primary entry pathway for high-skill STEM immigrants into the U.S. workforce, and the cumulative economic costs of such restrictions would amount to hundreds of billions of dollars annually within a decade.