Study looks at the economic benefits of attracting international students

by Ray Clancy on April 28, 2014

Tuition, immigration and tax policies all have an effect on the economic and financial benefits of an international student’s study in a foreign country, new research suggests.

Studying abroad is now regarded as one way of improving the chances of getting a high flying job, but there are a lot of financial and economic costs to be taken into account when it comes to attracting foreign students.

There are lots of financial and economic costs to be considered when it comes to attracting foreign students.

According to a new study by the German Academic Exchange Service that explores the direct cost-benefit relationships of international students as they pertain to host institutions and host countries, cost is a huge factor affecting the economic benefits created by international students.

The study looked at Germany, the Netherlands, Austria, Poland, Switzerland and Spain and found that in some countries it can take much longer for the economic benefits of international students to outweigh the costs of hosting them. It also showed how important retaining international students post-graduation can be to the host country’s economy.

Issues taken into account included revenues from tuition fees, the cost of recruiting overseas students, student spending, job creation, and how long it would take each country participating in the study to realise benefits from international students that are more substantial than the costs incurred in hosting them.

It points out that on top of immediate economic benefits, there is a boost to cross-border knowledge—student mobility helps the formation of international networks which can bring long term economic benefits and boost economic relations between countries.

The study found that Switzerland has the highest cost of living for students and students who stay on to work in a country after graduation pay higher taxes in countries like Germany and Austria and less in Poland.

It also points out that the cost to a national economy of hosting international students is less in countries like the US, Canada, the UK, and Australia, where international students pay differential fees designed to recover the full costs of the student’s programme of study. While these countries were not part of the study, it points out that it is reasonable to assume that the economic benefit of international students for such host countries is considerably higher given the greater tuition differentials involved.

For some countries more than others, the retention of international students can dramatically alter the extent of the benefits produced by international students. ‘In the event that 30% of the international students remain in the country after completing their studies, the investment Germany makes on providing places of study could already be amortised after a period of five years. In Switzerland, on the other hand, the costs would only be covered after a period of around 17 years because of the combination of high costs for providing places of study in Switzerland and the low tax rates in that country,’ it explains.

Overall, the study concluded that the benefits of encouraging overseas students outweigh the costs, but it can take time. International students do end up producing a net positive economic benefit for a host country, and this is distributed through the economy differently depending on how the economy functions.

The long term benefits are more obvious when a student stays after graduation because of job creation and new spending, as well as revenues from taxation that international graduates generate by remaining in the country to work.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: