Giovanni Peri, UC Davis

Paper: The Contribution of Foreign Master’s Students to US Start-Ups

Abstract: This paper estimates the causal effect of international student enrollment in US Master’s programs on start-up creation in the United States over the period 1999–2019. Using university-cohort data linked to administrative enrollment records and comprehensive start-up data, we exploit two complementary sources of plausibly exogenous variation in international enrollment: tuition changes and pre-2004 enrollment networks. We find that higher international enrollment significantly increases start-up formation within five years of graduation. A substantial share of this effect operates through spillovers to US-born graduates educated alongside international students. These indirect effects suggest that prior estimates understate the contribution of international students to entrepreneurial activity in the US.