The Effect of Foreign Students in Higher Education on Native Students’ Outcomes

This paper offers new evidence of the role of immigration in shaping the educational and labour market outcomes of natives. We use administrative data on the entire English higher education system and exploit the idiosyncratic variation of foreign students within university-degree across four cohorts of undergraduate students. Foreign peers have zero to mild effects on natives' educational outcomes, such as graduation probability and degree classification. Significant effects are found on displacement across universities and degree types after enrolment, although these outcomes are rare occurrences. In line with the mild effects on education outcomes, we also find little evidence of foreign peers affecting early labour market outcomes of native graduates.