Friday, October 26, 2007

Economics of a Foreign Education!!

Incentives and opportunity costs are the most basic things that are taught in intro econ courses. People respond to incentives and opportunity costs play an important role in individuals' choices. As a third year grad student, my incentive structure is pretty clear, either be productive, progress towards dissertation and write papers or lose funding for the fourth year. I have always felt that the opportunity costs facing international students is higher than that of local students. Not only are our funding choices fewer, we have the added disadvantage of lower access to local credit markets and the added burden of keeping the immigration authorities happy by remaining in status all the time. As foreign students we also have to adapt to the local school conditions pretty quickly while experiencing culture shock and being far away from the comfort of family and close friends and a known environment. Thus, if I were to model this, the number of variables that enter the equation for foreign students is much higher than that of local students. Given that, academic performance is the sole judgment criterion and none of these other variables enter into the equation and both international and local students are assessed solely based on academic merit. This has always seemed a little unfair to me. On the other hand, foreign students do make the conscious choice to study here far away from a comfortable environment. Thus we may be able to say that these have been factored into their preference function. Then again, there are so many uncertainties. Even I, a very progressive open minded and much-aware-of-American-culture-before-I-came-here kind of person have adjustment problems. Its a high cost to pay with uncertain returns. Are the economic costs of my economics education worth the economic and non economic benefits? Must be!! Otherwise, I would have quit long back and done something that was more worth my time!! Who said people do not make economic decisions or that they do not think in terms of economics at every juncture of their lives? But then again I am a nerdy economist in the making, who sees economics in everything, just like Neo could see through the Matrix!! :)

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