The unintended consequences of international student shortage: Evidence from a policy reform in South Korea

• Main Authors: CHOI, Syngjoo, CHOI, Chung-Yoon, KIM, LEE, Jongkwan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: International Students; Local Economy; Higher Education; Student Screening; South Korea; Asian Studies; Education Policy; Labor Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/2729; https://ink.library.smu.edu.sg/context/soe_research/article/3728/viewcontent/Foreign_student_quota.pdf
• Institution: Singapore Management University

We study the role of international students in the higher education sector and the local economy by exploiting a policy reform in South Korea that significantly restricted the admission of foreign students to local universities. By comparing the pre- and post-reform differences between universities with different pre-reform shares of international student enrollment, we find limiting the inflow of international students significantly worsened the financial outcomes of local universities. We also document that a reduction in the number of international students in local areas resulted in decreases in native employment, mainly in sectors such as agriculture and business support services, suggesting that limiting the inflow of international students can have unintended spill-over effects on the local labor market.