The PIE: How did you become interested in the economics of higher education?

Morton Schapiro: My focus in graduate school was on labour economics. I was interested in education and the impact of educational investments, growth rates, and rates of return of different types of degrees. It’s a good field and there is a lot we don’t know about educational outcomes – but some things we do know: enrollment response to changes in prices, for example. In addition to being a professor, I have a day job as a president, which gives me a different perspective on the topic than just teaching and researching.

It makes it a lot more real. Before I became a president it was easy to make fun of inefficiency in higher education. Once I became president, I realised, “oh, maybe it’s a little harder than it looks.” Once you get the reality of trying to run a college or university, it gives you a different perspective.

“Once you get the reality of trying to run a college or university, it gives you a different perspective”

The PIE: International students can be an important revenue source for some institutions. How can this situation be reconciled with efforts to widen access?

MS: We, for example, seek donors to support need-based financial aid for students from outside the US. It’s expensive because you can’t give them any federal aid. And it’s hard to raise the money. I have been a president for 19 years, and it’s always been a passion of mine to bring in brilliant kids from all over the world who aren’t from the families in the top 5%.

But it’s hard to get financial aid for those students. We have been successful sometimes. We had this one donor in particular who had a passion for international students, and came to me and said “I know the vast majority of international students who come here come from really affluent families, how about I give scholarship money to bring in other students?”

The PIE: Would it make sense to offer this support in a more systematic way, maybe at state level?

MS: I think you can justify it when you bring in the best and the brightest from around the world. But you’d better have visa programs in place to allow graduates to work. If a taxpayer of a certain country is going to subsidise students from outside that country, that can be only justified by the prospect of a better economy and prosperity.

As public subsidies increase for those students, we need to make sure that they will eventually work and pay taxes. There’s often a lack of connection between bringing students in and long-term thinking – are these students going to stay or not? We have that problem in the US and in the UK.

“As public subsidies increase for those students, we need to make sure that they will eventually work and pay taxes”

The PIE: The OPT has been under attack occasionally – are these attacks justified?

MS: As an economist, attacking the OPT doesn’t make sense at all. If you have the best and the brightest come to your country and their education is – to some extent – directly or indirectly subsidised by the country, you want them to add to economic growth and prosperity by working and paying taxes. And if you “evict” them, so to speak, after they have finished their studies, that’s crazy.

And I would argue it’s not just STEM fields. At Northwestern we have a great journalism program, just like other institutions whose programs are the main sources for journalists at Bloomberg, New York Times, Washington Post etc…  Do you want to kick those students out? I don’t want to kick out the journalists, the literature majors, the archaeologists. As an economist, how could you possibly argue against the OPT – especially when you have an unemployment rate that is 3.6%?

The argument of stealing jobs is discredited by economists. There is an enormous literature on that. It’s hard to find economists who argue there should be significant restrictions on immigration. But that’s more of a political issue than an economics issue – I think the economic literature is very clear on this. Particularly if you are going to subsidise the education, and then you kick them out just when they are about to pay back that investment.

But there is quite a big difference between what the economics literature says and what politics says. Look at Brexit. Did people really vote with the economic interest at heart? I do political advising, and sometimes I think that if politicians knew the facts, they would act differently. But I talk to politicians and they say they are not naïve, I am naïve.

“There is quite a big difference between what the economics literature says and what politics says”

The PIE: Which countries are using this policy well?

MS: Some countries are more forward-looking than others, but it gets back to politics. With the anti-immigration fervour and nationalism in some countries, you can’t convince people to change their view by giving them the results of some economics studies. It’s emotion, right?

But you have to hope that politicians realise this: particularly with birth rates going down in so many countries, you need to have net immigration. I hope that politicians will figure it out, and listen more to economists, and attract more of the best and the brightest from outside the country, and then let them live there.

With the ageing population, what is the alternative?

The PIE: In your book, you make the point that college choice is a cultural choice – students sometimes choose a school where they think they have a better chance of “fitting in.” Do international students have the power to change the institution’s culture and make it more inclusive?

MS: That could be the case. When you increase international student influx, it’s different. The irony is, when there are just a few, international students tend to be more insular. People think: well, it’s only 4%, they must integrate quickly with the remaining 96%. But in my experience, it doesn’t work that way.

If you have small enclaves of international students, they are more likely to live together, they are more likely to speak the home language and not to avail themselves of all the opportunities.

If you go to the US, you have to go to a football game, and basketball, and theatre and music performances – that’s a part of what the education is about. But I have often found in many years of teaching international students that sometimes they tend to integrate less well.

But when there are more of them, it’s less likely they want to stay in their enclave because they don’t feel so different and separate.

The PIE: What is your piece of advice for international students?

MS: I love teaching undergraduate international students. They have the guts to leave their countries, often to go somewhere where they don’t speak their first language, and they come so far. And they are great academically!

But what I always say to international students is: don’t live with each other, particularly if you are educated in a language other than English, or do everything together. Think about joining fraternities and sororities, for example. Part of what you are going to learn in the next four years is not just what you’ll learn in the classroom.

But I find it’s sometimes a tough sell. Some international students are studying things they don’t really want to study, because they are forced by their parents to study engineering or some fields that are not their natural inclination. In China or Korea, for example, parents have more power to influence students’ choices.

So I find, when I teach econometrics students for example, the American students are there by choice, and a number of international students are there by their parents’ choice. And many have a double major – economics and journalism, for example. Many tell me they have a practical major, and an academic passion major.