Gaurav Khanna
Education
Working Papers:
The IT Boom And Other Unintended Consequences of Chasing the American Dream (with Nicolas Morales) reject and resubmit at the American Economic Review
We study how US immigration policy and the Internet boom affected not just the US, but also led to a tech boom in India. Students and workers in India acquired computer science skills to join the rapidly growing US IT industry. As the number of US visas was capped, many remained in India, enabling the growth of an Indian IT sector that eventually surpassed the US in IT exports. We leverage variation in immigration quotas and US demand across occupations to show that India experienced a ‘brain gain’ when the probability of migrating to the US was higher. Changes in the US H-1B cap induced changes in fields of study, and occupation choice in India. We then build and estimate a quantitative model incorporating trade, innovation, and dynamic occupation choice in both countries. We find that high-skill migration raised the average welfare of workers in each country, but had distributional consequences. The H-1B program induced Indians to switch to computer science occupations, and helped drive the shift in IT production from the US to India. We show that accounting for endogenous skill acquisition is key for quantifying the gains from migration.
Abundance from Abroad: Migrant Income and Long-Run Economic Development (with Emir Murathanoglu, Caroline Theoharides and Dean Yang)
How does income from international migrant labor affect the long-run development of migrant-origin areas? We leverage the 1997 Asian Financial Crisis to identify exogenous and persistent changes in international migrant income across regions of the Philippines, derived from spatial variation in exposure to exchange rate shocks. The initial shock to migrant income is magnified in the long run, leading to substantial increases in income in the domestic economy in migrant-origin areas; increases in population education; better-educated migrants; and increased migration in high-skilled jobs. 77.3% of long-run income gains are actually from domestic (rather than international migrant) income. A simple model yields insights on mechanisms and magnitudes, in particular, that 23.2% of long-run income gains are due to increased educational investments in origin areas. Improved income prospects from international labor migration not only benefit migrants themselves, but also foster long-run economic development in migrant-origin areas.
Hometown Conflict and Refugees' Integration Efforts (with Cevat Giray Aksoy, Victoria Marino and Semih Tumen)
How does violence in origin areas affect the educational outcomes of refugees in their destinations? Using administrative panel data, we find that heightened violence in the hometowns of Syrian students leads to improvements in their school outcomes in Turkiye. Turkish language and Math scores of refugee students improve, with larger impacts on Turkish scores. There is no impact on naturalized Syrian students. We observe positive spillovers on Turkish students. These findings suggest ongoing violence in refugee-origin areas reduces the prospect of returning home, and induces students to better integrate into host countries by investing in education.
Journal Publications:
Migration Policy and the Supply of Foreign Physicians: Evidence from the Conrad 30 Waiver Program (with Breno Braga and Sarah Turner) forthcoming at the Journal of Economic Behavior & Organization.
In the United States, rural and low-income communities have difficulty attracting and retaining physicians, potentially adversely impacting health outcomes. With a limited supply of physicians completing medical school at US universities, foreign-born and educated physicians provide a potential source of supply in underserved areas. For international medical school graduates (IMGs) the terms of the commonly used J-1 visa require a return to the home country for two years following employment in medical residency. Our analysis examines the extent to which the Conrad 30 Visa Waiver impacts the supply of physicians at state and local levels, particularly in areas designated as medically underserved. Changes in the federal limit on the number of waivers per state, combined with variation in the state-level restrictions on eligible specialties, and geographies in which physicians can work, provide evidence on the role of visa restrictions in limiting the supply of doctors. Expansion of the cap on visa waivers increased the supply of IMGs, particularly in states that did not limit waiver recipients to primary care physicians or particular places of employment. There is little evidence of reductions in US-trained doctors in states where IMG increases were the largest, suggesting little evidence for crowding out.
Trade Liberalization and Chinese Students in US Higher Education (with Kevin Shih, Ariel Weinberger, Mingzhi Xu and Miaojie Yu) Review of Economics and Statistics, 23 October 2023, doi: https://doi.org/10.1162/rest_a_01378
We highlight a lesser-known consequence of China’s integration into the world economy: the rise of services trade. We demonstrate how the US’s trade deficit in goods cycles back as a surplus in US exports of education services. Focusing on China’s accession to the World Trade Organization, we show that Chinese cities more exposed to trade liberalization sent more students to US universities. Growth in housing income/wealth allowed Chinese families to afford US tuition, and more students financed their studies using personal funds. Our estimates suggest that recent trade wars could cost US universities around $1.1 bn in annual tuition revenue.
Large-scale Education Reform in General Equilibrium: Regression Discontinuity Evidence from India
Journal of Political Economy, vol 131(2), February 2023 [presentation slides]
The economic consequences of large-scale government investments in education depend on general equilibrium effects in both the labor market and education sector. I develop a general equilibrium model that captures the consequences of massive countrywide schooling initiatives. I provide unbiased estimates of the model’s elasticities using a Regression Discontinuity design derived from Indian government policy. The earnings returns to a year of education are 13.4%, and the general equilibrium labor market effects are substantial: they depress the returns by 6.6 percentage points. These general equilibrium effects have distributional consequences across cohorts and skill groups: as a result of the policy, unskilled workers are better off and skilled workers worse off.
The Globalization of Postsecondary Education: The Role of International Students in the US Higher Education System (with John Bound, Breno Braga and Sarah Turner) Journal of Economic Perspectives, vol 35(1), Winter 2021
University learning has facilitated the flow of individuals and knowledge across national borders for centuries, but the recent scale of student flows and the magnitude of tuition revenues from foreign students across the globe is unprecedented. The number of students pursuing higher education degrees outside their home countries more than doubled between 2000 and 2017 to reach 5.3 million (UNESCO 2018).
The Effects of Elite Public Colleges on Primary and Secondary Schooling Markets in India (with Maulik Jagnani) Journal of Development Economics, vol 146 (2020)
We present the first estimates of the effects of higher education investments on lower levels of schooling. Using the roll-out of elite public colleges in India, we show that investments in higher education increased educational attainment among school-age children. Private schools entered districts with new elite public colleges, and students switched from public to private schools. In addition, elite public colleges crowded in investments in electricity, roads, and water services. We find suggestive evidence that public investments in infrastructure may have reduced setup costs for private schools, and consequently, travel costs for school-going children.
Does Affirmative Action Incentivize Schooling? Evidence from India Review of Economics and Statistics, Vol 102(2), May 2020 (Old title: "Incentivizing Standards and Standardizing Incentives: Affirmative Action in India”)
Affirmative action raises the likelihood of getting into college or obtaining a government job for minority social groups in India. I find that minority group students are incentivized to stay in school longer in response to changes in future prospects. To identify causal relationships, I leverage variation in group eligibility, school age cohorts, and state-level intensity of implementation in difference-in-differences and regression discontinuity designs. These estimators consistently show that affirmative action incentivizes about 0.8 additional years of education for the average minority group student and 1.2 more years of education for a student from a marginal minority subgroup.
A Passage to America: University Funding and International Students (with John Bound, Breno Braga and Sarah Turner) American Economic Journal: Economic Policy, Vol 12 Issue 1, February 2020
The number of international undergraduate students at US public research universities increased dramatically over the past two decades, alongside concurrent reductions in state support for universities. We show that these trends are closely connected as public research universities relied on foreign students to cushion the effects of falling appropriations. The growing capacity in emerging economies to pay for a US education provided opportunities for universities to recover revenues from full-fare-paying foreign students. We estimate that between 1996 and 2012, a 10 percent reduction in state appropriations led to an increase in foreign enrollment of 16 percent at public research universities. (JEL H75, I22, I23)
Book Chapters and Other Publications:
Finishing Degrees And Finding Jobs (with John Bound, Murat Demirci, and Sarah Turner - chapter in Innovation Policy and the Economy, Volume 15, William R. Kerr, Josh Lerner and Scott Stern, editors)
The rising importance of information technology (IT) occupations in the US economy has been accompanied by an expansion in the representation of high-skill, foreign-born IT workers. To illustrate, the share of the foreign born in IT occupations increased from about 15.5% to about 31.5% between 1993 and 2010, with this increased representation particularly marked among those younger than 45. This analysis focuses on understanding the role that US higher education and immigration policy plays in this transformation. A degree from a US college/university is an important pathway to participation in the US IT labor market, and the foreign born who obtain US degree credentials are particularly likely to remain in the United States. Many workers from abroad, including countries like India and China where wages in IT fields lag those in the United States, receive a substantial return to finding employment in the United States, even as temporary work visa policies may limit their entry. Limits on temporary work visas, which are particularly binding for those educated abroad, likely increase the attractiveness of degree attainment from US colleges and universities as a pathway to explore opportunities in the US labor market in IT.
Public Universities: The Supply Side of Building a Skilled Workforce (with John Bound, Breno Braga and Sarah Turner) RSF: The Russell Sage Foundation Journal of the Social Sciences
Over the past few decades, public universities have faced significant declines in state funding per student. We investigate whether these declines affected the educational and research outcomes of these schools. Declining funding induced public universities to shift toward tuition as their primary source of revenue. Selective research universities enrolled more out-of-state and international students who pay full fare and increased in-state tuitions, moderating impacts on expenditures. Public universities outside the research sector had fewer options to replace stagnating state appropriations, requiring diminished expenditures and increased in-state tuitions. We find suggestive evidence that cuts have negatively affected research, and more definitive evidence that they adversely affected degree attainment at both the undergraduate and graduate levels.