Economics Seminar - "Student and Institutional Responses to STEM Optional Practical Training"

The United States is a globally popular location for going to college. In fact, almost 350,000 international students were working towards their bachelors degree in the United States in the 2023-2024 academic year. In 2008, the Department of Homeland Security introduced an extension to the Optional Practical Training (OPT) program, which allows international students to work in the United States after earning a higher education degree. STEM students are now able to seamlessly work in the United States for an additional 24 months (above the standard non-STEM 12-months). This paper examines the effects of the OPT extensions using novel data from College and Beyond II, supplemented with University of California-Irvine administrative data. I employ a cohort-based difference in difference approach to explore the relationship between the OPT policy change and undergraduate students’ course and degree choices. I find an
increase in enrollment in STEM majors after the OPT extensions for international as well as domestic students. Additional findings show that after the extensions, institutions with higher international student proportions have greater STEM cohort sizes for domestic students. I also study institution-level responses to the policy changes to help uncover mechanisms behind my results, especially for domestic students. Supply-side outcomes as a result of these policies are that new majors are more often STEM and maximum seat allotment for STEM courses increases after the OPT extensions. Results from this research shed light on how the OPT extensions have impacted students and institutions, contributing to a broader understanding of the effects of immigration policies aimed at enhancing the United States higher education system and eventually the workforce.