Paper #1940

Título:

The effect of retaining high-skilled international graduates: Evidence from the STEM OPT extension

Autores:

Seoyoung Kwon, Jongkwan Lee y Joan Monràs

Fecha:

Febrero 2026

Resumen:

High-skilled migration programs exist around the world in the hope that immigrants complement native workers, allow firms to grow, and boost innovation. We study the effect of one such program by exploiting the 2016 extension of the Optional Practical Training (OPT) program, which significantly prolonged the work authorization period for international STEM graduates. Using a synthetic difference-in-differences approach, we find that the policy successfully increased the local supply of high-skilled immigrants in exposed Commuting Zones. This local inflow stimulated firm creation and the demand for native high-skilled workers. The program might have also boosted innovation in certain sectors and startup investment, especially in Commuting Zones hosting top-ranked universities, where, overall, the effects tend to be larger.

Palabras clave:

Immigration, labor demand, firm dynamics, high-skilled migration

Códigos JEL:

F22, J31, J61, R11

Área de investigación:

Macroeconomía y Economía Internacional

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