Quotas and Quality: The Effect of H-1B Visa Restrictions on the Pool of Prospective Undergraduate Students from Abroad

In October 2003, the United States drastically reduced the number of H-1B visas available for foreign-born workers. Such restrictions could make U.S. colleges less attractive to foreign students considering an American education as a pathway to U.S. employment. Citizens from five countries are de facto exempt from the visa restrictions, however. Our difference-in-difference estimates show that restrictive immigration policy reduced SAT scores of international applicants by about 1.5% and decreased the number of SAT score reports sent by international students at the top quintile of the SAT score distribution. Restrictive immigration policy disproportionately discourages high-ability international students from pursuing education in the United States.