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The Economic Costs and Benefits of International Students
Phil Vickers and Bahram Bekhradnia
Higher Education Policy Institute July 2007
Introduction
1. During the second half of the last century, and continuing this, there has been a steady upward trend in the numbers of international students – from the EU and beyond - studying in UK HEIs. This report examines the economic benefit the UK receives from the presence of these international students and in the case of EU students compares these benefits with the substantial subsidy they receive from the UK 1 taxpayer . 2. The full benefits these students bring to the UK economy (and society in general) are impossible to quantify, and some (for example cultural) have no readily measurable economic value. There is already a body of literature examining the theoretical effects that international students have on the host country, and this report does not seek to add to this, nor to provide a full economic analysis. Rather, it seeks to identify the main costs and benefits, and to estimate their orders of magnitude, in order to arrive at some policy conclusions. The best recognised of the economic effects is the impact of international students’ spending on tuition fees and living costs. Also, since several thousand remain in the UK each year to work, having graduated from a UK HEI, the report also quantifies the impact that this has on the UK economy. 3. This section of the report briefly outlines the number of international students in the UK, other relevant background factors, and how these have changed in recent years, and then gives a brief overview of some of the issues relating to the examination of the economic impact of international students. The second section quantifies the direct effects 2 of expenditure on tuition fees and other living costs . The third section examines the possible effects of international students remaining in the UK to work following graduation. The final section assesses the
Phil Vickers and Bahram Bekhradnia
Higher Education Policy Institute July 2007
Introduction
1. During the second half of the last century, and continuing this, there has been a steady upward trend in the numbers of international students – from the EU and beyond - studying in UK HEIs. This report examines the economic benefit the UK receives from the presence of these international students and in the case of EU students compares these benefits with the substantial subsidy they receive from the UK 1 taxpayer . 2. The full benefits these students bring to the UK economy (and society in general) are impossible to quantify, and some (for example cultural) have no readily measurable economic value. There is already a body of literature examining the theoretical effects that international students have on the host country, and this report does not seek to add to this, nor to provide a full economic analysis. Rather, it seeks to identify the main costs and benefits, and to estimate their orders of magnitude, in order to arrive at some policy conclusions. The best recognised of the economic effects is the impact of international students’ spending on tuition fees and living costs. Also, since several thousand remain in the UK each year to work, having graduated from a UK HEI, the report also quantifies the impact that this has on the UK economy. 3. This section of the report briefly outlines the number of international students in the UK, other relevant background factors, and how these have changed in recent years, and then gives a brief overview of some of the issues relating to the examination of the economic impact of international students. The second section quantifies the direct effects 2 of expenditure on tuition fees and other living costs . The third section examines the possible effects of international students remaining in the UK to work following graduation. The final section assesses the
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