AnneM (AnneM@edc.org)
Wed, 22 Apr 1998 08:29:05 -0400

Forwarded from WISENET
From: Women In Science and Engineering NETwork <WISENET@LISTSERV.UIC.EDU>
at Internet
Date: 4/21/98 22:39

Economists Jagdish Bhagwati and Milind Rao Explain the Economics of the
Present Labor "Glut" in the Science and Engineering Labor Market.

Q: What are the major causes of the present "glut" of scientists and
engineers and why is the situation not abating?


by Jagdish Bhagwati and Milind Rao

What a difference a few years makes. Until very recently, voices
filled the air with complaints that the United States lacked
adequate science talent. Now, suddenly, a widely-reported
Stanford-RAND study has drawn an alarming picture of a glut of
science & engineering Ph.D.s. Current S&E graduates, the study
claims, have low prospects of getting suitable jobs, with perhaps
one in four having to accept a position below the expected rung
of university instructor or corporate researcher. Calls for
reductions in science education have begun to be heard in the
land. There are demands even to reduce foreign student admissions
and to restrict the entry of foreign scientists to the United

But these demands are badly flawed. A benign, even beneficial,
situation has been misportrayed by alarmists as something
harmful. A "glut" of scientists and engineers is something we
should welcome rather than deplore. Abundance makes talent
available to increasing numbers of universities, research labs
and corporations that otherwise could not access it.

Foreign students are in fact, at the heart of both the "glut"
and its beneficial effects for the United States. Large
proportions of the students coming out of American science and
engineering graduate schools today are foreign students. The
cause of this is a sharp increase in superbly trained and
screened foreign applicants. These students study. They make
valuable contributions in university labs. And because they
generally end up as immigrants they add to the supply of
talented scientific manpower in the country, which can only
benefit the United States.

And the foreigners themselves also benefit, even in an
oversupplied professional market. For the fact is, even a
secondary position in the United States is usually going to be
more stimulating and lucrative than working in their home
country for many of the young scientists in question. Even
deflated by the Stanford-RAND estimates of only a three-in-four
chance of getting a "suitable" job, the returns to individual
students and to the U.S. from graduate science education are
quite attractive.

First, the facts: In 1990, over 50 percent of the engineering
Ph.D. s in the United States were awarded to foreign students.
The figures are almost as high in mathematics, physics,
chemistry, and computer science. More than eight out of every
ten foreign graduate students in the U.S. is in a S&E program,
with over half of these students coming from just four
countries: Taiwan, China, Korea, and India.

The vast majority of these students are tremendously talented.
From among the large populations in their home countries they are
hand picked through mandarin-style entrance examinations for
undergraduate study at their leading national universities and
institutes. Their supply has increased substantially as the four
countries named above have built up first-rate scientific and
engineering programs, often with the help of America's best
universities. Thus, for instance, about three-fourths of the U.S.
engineering Ph.D.s recently awarded to Indians went to graduates
of the prestigious institutes of technology there, while
two-thirds of those going to South Koreans went to graduates of
the famous Seoul National University. These gifted and
splendidly trained students apply into our S&E programs and win a
growing share of our admissions, which are based overwhelmingly
on merit.

The explosion of superb foreign applicants to science and
engineering programs has not been accompanied by similar
increases among native- born Americans. In fact, there is some
evidence that science and engineering programs have recently
become slightly less attractive to our best native-born
students. The "professional" schools of law, medicine, and
business have substantially better starting salaries at present,
and a small edge also in average rates of return. S&E graduate
programs, on the other hand, are vastly more attractive to
talented foreign students because most of them are
cash-strapped, and professional schools, unlike S&E programs,
offer little financial aid or paid research employment for
graduate students.

The preponderance of foreign students in S&E programs has an
important consequence in the technical job market-certain
"gluts" are likely to persist. The traditional way in which such
"gluts" are removed is simply by market forces: students walk
away from education that yields low rates of return. But when
foreign students are in the game, the market returns must fall
more drastically before this happens. Even the currently
diminished rates of return are unlikely to turn away foreign S&E
students, because even these reduced rates return will be
favorable compared to the compensation in their home countries.
Thus, even if they must wind their way down to second-tier jobs
at smaller colleges instead of MIT or Caltech, or less lucrative
corporate positions, they will still do substantially better
than had they stayed or returned home. This means that scientist
and engineer gluts, and consequent gripes against universities,
can be expected to continue.

But why should we take this as a problem? As these Ph.D.s
eventually take jobs downstream, their expertise becomes
available to institutions and firms that can benefit from
superior talent and education at unexpectedly affordable prices.
Economists have documented how such downstreaming improves
national medical care, for instance, as doctors crowded into
urban areas find their earnings falling and then begin to settle
in rural areas. This should be a matter for satisfaction, not

Should we be concerned that so many students are not
native-born? Many, such as Phillip Griffiths of the Institute
for Advanced Study at Princeton have been quoted as worrying
about the preponderance of foreigners in graduate science and
engineering programs. This concern is misplaced. Foreign
graduate students typically stay on in this country. Indeed, the
possibility of eventual immigration is often the reason why
entering our graduate programs and working hard to acquire the
education necessary for America's highly competitive labor
market is attractive to talented foreigners in the first place.

Recent estimates suggest that nearly three-quarters of those
trained in America remain in America. The final figure may be
even higher, for some returnees (like the first author)
initially go home only to return later to a rewarding
professional life in the United States when circumstances
permit. This in-migration of brainpower is a great bonus to our
country. Consider that fully 50 percent of the assistant
professors hired in engineering in the U.S. in 1992 were
foreign-born. Yet even if it is clear that the arrival of
foreign science and engineering students is a boon to the United
States as a whole, one might worry that particular sub-groups of
the population could be hurt by the competition. Some black
educators have made the specific argument that foreign students
in Ph.D. programs are crowding out blacks. An example would be
Frank Morris writing in the Urban League Review in l993. Since
total black Ph.D.s have tapered off while those awarded to
foreign students have shot up, advocates seek restraints on
foreign acceptances.

The facts on black higher education, particularly in the
sciences, are indeed disappointing. The remedy of excluding
foreign applicants, however, is unwarranted. For one thing, the
number of native-born Americans in S&E Ph.D. programs has not
declined. As increasing numbers of foreign students have
arrived, native enrollments have held constant over the last 30
years at around 13,000 annually.

As for financial "crowding out," it is true that 60 percent of
all foreign graduate students in the U.S. are aided financially
by their university, much higher than the 25 percent of black
graduate students so helped. But the reason for this
differential is the very different fields of study chosen, on
average, by the two groups. Fully 81 percent of foreign graduate
students are in science and engineering programs- where almost
all students are wholly supported by their university (mainly
through assistantships in funded research projects). On the
other hand, black graduate students are overwhelmingly enrolled
in the field of education and in humanities programs where there
is much less aid. Eliminate the field of study difference and
blacks do immensely better. Over 70 percent of the black
graduate students in the physical sciences, for instance,
receive substantial aid from their universities.

A final reason for caution is that the number of blacks within
science and engineering graduate programs has actually increased
in the last two decades, both in total and as a fraction of all
black Ph.D.s. The main problem facing blacks in the field of
science and engineering today is the small and shrinking pool of
the blacks with bachelors degrees in science. The number of
blacks securing bachelors in science and engineering fell from
18,700 in 1975 to 18,400 in 1990, even as the total number of
these degrees awarded was on the increase. The gnawing problem
of too few blacks in scientific graduate programs has causes and
solutions quite unrelated to the arrival of foreign students.

The intelligent and highly motivated foreign students who come
to this country for scientific education and then "stay on" in
large numbers assimilate readily, becoming indistinguishable
from native- born Americans, who are themselves ethnically
diverse. The scientific eminence of the United States thus
reflects a virtuous circle: the best and the brightest from
around the world are attracted to our universities, and they in
turn help make our universities world class.

This heavy influx of talent is a sign of our strength, not of a
problem or weakness. To dam the scientific inflow instead of
removing the debris that clogs the streams would be folly.

By Jagdish Bhagwati and Milind Rao. Jagdish Bhagwati is a
visiting scholar at the American Enterprise Institute, and
Arthur Lehman professor of economics at Columbia University.
Miland Rao is associate professor of economics at Colgate
University. Bhagvati, Milind, The false alarm of `too many
scientists'.., Vol. 7, American Enterprise, 01-01-1996, pp 71.

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