Foreign students in college and the supply of STEM graduates

Do foreign students affect the likelihood domestic students obtain a STEM degree and occupation? Using administrative student records from a U.S. university, we exploit idiosyncratic variation in the share of foreign classmates in introductory math classes and find thatforeign classmates displace domestic students from STEM majors and occupations. However, displaced students gravitate towards high earning Social Science majors, so that their expected earnings are not penalized. We explore several mechanisms. Results indicate that displacement is concentrated in classes where foreign classmates possess weak English language ability, suggesting that diminished in-class communication and social interactions might play animportant role.