B-schools (and America) lose overseas customers

Business Week has an interesting article about how fewer foreign students are planning to enroll in US MBA programs next year.

Once upon a time, graduate students — mainly Europeans, Indians and Chinese — came to the US to get both a degree and a job here. Now students (rightfully) worry about getting work visas, and the Chinese (but not Indian and European) students think job prospects are better back home.

Of course, with the economy tanking, lots of people worry about getting a job in the US now; taking on $250K in debt in hopes of landing the six-figure paycheck is an understandably scary thought. The TARP bailout has also effectively prevented recipients from hiring H-1B students, forcing banks to rescind their prior job offers.

I have mixed feelings on this. On the one hand, every international student accepted is keeping out a local student. In many cases, the international students are more talented, but often (particularly in public universities) it seems like colleges take students with better math and worse English skills because they pay more.

On the other hand, one of the biggest American policy successes of the postwar era has been attracting the best and the brightest of the world to go to grad school and work here. We have been not just a beacon of political liberty, but of economic liberty as well.

Many of my local friends — particularly parents of my daughter’s classmates — are part of this Silicon Valley melting pot. I probably have a skewed sample: those who get married and move to suburbia, raise kids and get involved in their children’s education.

However, it seems as though employers are doing society a favor by saying “this person has the skills and personality to be an asset to our economy” and bringing over the highly-skilled, highly-educated workforce. (I feel quite a bit differently about importing would-be doctors and engineers and research scientists than I do about truck drivers, janitors — or lawyers.)

Of course, in times of economic contraction, worker-voters want to throw out all the foreign workers. (It has gotten particularly ugly in Britain). And it’s easy for a college professor and government employee with a lifetime employment guarantee to pooh-pooh such fears.

Still, economic growth comes from increases in total factor productivity. Attracting bright capable people from around the world — as well as keeping America the most desirable place in the world to live — would seem to be an important cultural and national asset in the coming century.