Publication Type
Journal Article
Version
submittedVersion
Publication Date
7-2026
Abstract
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 restricted the admission of foreign students to local universities. By comparing the pre- and post-reform differences across universities with different pre-reform shares of international student enrollment, we show that an international student shortage resulting from this policy reform significantly worsened the financial outcomes of universities and consequently led to reduced investment in their students. We also document that a reduction in the number of international students in local areas decreased native employment, mainly in low-skilled sectors such as business support services. Our findings suggest that limiting the inflow of international students can have unintended negative spillover effects on both universities and local labor markets.
Keywords
International Students, Local Economy, Higher Education, Student Screening, South Korea
Discipline
Asian Studies | Education Policy | Higher Education | Labor Economics
Research Areas
Applied Microeconomics
Publication
Education Finance and Policy
Volume
21
Issue
3
First Page
507
Last Page
534
ISSN
1557-3060
Identifier
10.1162/EDFP.a.442
Publisher
MIT Press
Citation
CHOI, Chung-Yoon; CHOI, Syngjoo; KIM, Seonghoon; and LEE, Jongkwan.
The unintended consequences of international student shortage: Evidence from South Korea. (2026). Education Finance and Policy. 21, (3), 507-534.
Available at: https://ink.library.smu.edu.sg/soe_research/2729
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1162/EDFP.a.442
Included in
Asian Studies Commons, Education Policy Commons, Higher Education Commons, Labor Economics Commons