TY  - RPRT
        AU  - Clemens, Michael A.
        TI  - Taxes on International Students: Demand and Supply Response for Post-Graduation Foreign Workers on Optional Practical Training
        PY  - 2026/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18933
        UR  - https://www.iza.org/publications/dp18933
        AB  - The US government has proposed various taxes on high-skill immigration. The effects of such taxes hinge on price elasticities of demand and supply that the literature has rarely measured. I estimate key elasticities to evaluate a $100,000 tax on Optional Practical Training (OPT) work permits for international graduates of US universities, the largest single channel of high-skill immigration to the US. Depending on the tax's incidence, evaluation requires the price elasticity of demand for US degrees with the OPT option, of universities' supply of OPT placements, or of employers' demand for OPT workers. In all incidence scenarios, OPT starts at a given level of international enrollment fall by roughly a third or more, and by four fifths under university or employer incidence in the central scenarios. The decline in OPT opportunities would cut international enrollment, costing universities hundreds of millions to over four billion dollars a year in net margin, before any compounding with taxes on work visas such as the H-1B. The need for better estimates will grow with the prevalence of immigration taxes.
        KW  - Optional Practical Training
KW  - H-1B
KW  - immigration
KW  - immigrant
KW  - labor
KW  - tax
KW  - fee
KW  - payment
KW  - duty
KW  - tariff
KW  - skill
KW  - talent
KW  - foreign
KW  - student
KW  - graduate
KW  - college
KW  - higher ed
KW  - university
KW  - demand
KW  - supply
KW  - elasticity
KW  - STEM
        ER  -