The global economic impact of 5.1 million international students in 2016 can be estimated at US$300 billion. But student mobility is being threatened by a confluence of forces – lower prospects of work and higher costs of education. Urgent action by governments and universities is needed to sustain the momentum of student mobility, says a new report by higher education strategist Dr Rahul Choudaha of Studyportals.
Beyond $300 billion: The Global Impact of International
Students examines three ‘waves of mobility’ since 2001 and argues that one of the defining characteristics of the ‘third wave’ from 2016 on is “anti-immigrant and nationalistic overtones in high-income countries”.
New barriers to student mobility include securing study and post-study work visas, and job market complexities. Meanwhile, declining budgets and growing competition are placing pressure on universities to increase revenue by raising international enrolment and fees, writes Choudaha, executive vice-president of global engagement and research for Studyportals.
“The interplay of these challenges of higher cost and lower prospects of finding jobs is making it more difficult for students to recover their investment and hence they are becoming even more conscious about the importance of value for money.”
It is important to break the barriers of visas and costs to sustain the momentum of global student mobility, Choudaha concludes. This requires efforts to align national policies with university strategies. Visa and immigration policies must become “proactive and welcoming”, while universities “must reinvest in strategies that grow the international student body while balancing goals of diversity, quality, access and success”.
Economic impact of international students
The financial impact of international students is enormous but, he points out, it does not capture intangibles such as soft power or the academic, research, experiential and cultural dimensions of international students that contribute towards societies in source and destination countries, and towards an inclusive, innovative and interconnected global society.
Choudaha estimates the direct, indirect and induced value of 5.1 million globally mobile students in 2016 to be US$300 billion. He uses the data and definition of UNESCO Institute for Statistics, and data for 2016 because it was the most complete available.
The analysis presents two estimates: direct impact, which estimates the direct dollar amount spent in a destination country by students (includes tuition, fees and living expenses); and direct plus indirect plus induced impact. Indirect and induced impacts include knock-on effects of student spending on jobs, tax revenues and household income. The figures from a snapshot of destination and source countries draw on direct, indirect and induced economic impacts.
The estimated economic impact of international students in the United States is US$57.3 billion in 2016 with China, India and South Korea contributing $18.3 billion, $8 billion and $3.6 billion respectively.
For the United Kingdom it is US$25.5 billion with China contributing $5.3 billion, India $1.2 billion and Malaysia and Hong Kong $1 billion each; for Australia the figures are US$19.8 billion with China, India and Nepal contributing $6.6 billion, $2.7 billion and $0.87 billion respectively; and for Canada they are US$11.2 billion with China, India and France contributing $3.6 billion, $1.2 billion and $0.9 billion respectively.
For France the economic impact of international students in 2016 was US$6.7 billion with Morocco, China and Algeria contributing $1.7 billion, $1.4 billion and $1 billion respectively; for Germany the numbers are US$6.7 billion with China, India and Austria contributing $1.5 billion, $0.7 billion and $0.6 billion; and for the Netherlands they are US$5.3 billion with Germany, China and Italy contributing $1.3 billion, $0.3 billion and $0.18 billion respectively.
Regarding source countries, the estimated economic impact of international students from China is a whopping US$51.1 billion in 2016, and from India it is US$17.8 billion.
Trends and patterns of student mobility
Choudaha deploys a conceptual framework of three waves of international student mobility, and analyses the recent history of global student mobility and its implications for future trends.
‘Wave I’ from 2001 to 2008 was shaped by the terrorist attacks of 9/11; student demand shifts from the US (+31%) towards Australia (+91%), Canada (+119%) and the UK (+51%); the Bologna Process providing a policy framework for growing student mobility in Europe and the launch of English-taught programmes; excellence initiatives for world-class universities in Asia; growth in student numbers from China and India – mostly at the masters and doctoral level – and Japan as a regional hub.
Wave II from 2008 to 2016 was affected by the global recession. American universities became proactive in international student recruitment; Australia and the UK experienced some tightening of post-study work rights for international students; universities in continental Europe gained from intra-Europe mobility, and some countries from introduction of tuition fees for non-European Union students.
There was also the growth of international branch campuses, and a rise in global rankings by some Asian countries (for instance China, Singapore) gave them traction as regional hubs. The rapid expansion of the Chinese upper-middle class fuelled growth at the undergraduate level, while Indian students continued to enrol at masters level.
WAVE III from 2016 onwards has been influenced by a new political order of anti-immigrant policies and rhetoric, writes Choudaha. The US and UK face prospects of stagnancy or decline in enrolments due to increasingly restrictive immigration policies and uncertainty. Canada and Australia have been reflecting on sustainability of growth and over-reliance on few countries.
Regional hubs in Asia have wrestled with some student integration (language and culture) challenges; and turbulence in Europe has triggered policy questions related to tuition, housing and stay rates. As international students from upper-middle-income China slow down, lower-middle-income countries such as India, Nigeria and Viet Nam are likely to drive growth.
Leadership perspectives
The report presents views from 11 university leaders, who reaffirm the importance of international students for institutions and countries, the key role of visa and work processes, and the need for multi-faceted university support for international students and diversity.
KM ‘Koen’ Becking, president of Tilburg University, said the attraction of the Netherlands was a combination of quality English-taught programmes and relatively low fees. Increasingly the focus was on “retaining more of the talented students after their studies in the Netherlands. For example, by offering Dutch classes early on, or by making it easier for almost-graduates to enter the labour market by offering internships.”
University of Portsmouth Vice-chancellor Graham Galbraith said international students wanted opportunities for post-study work, to gain the graduate experience that improves employability. This was key and “policy in the UK will likely change to include a two-year post-study work option”.
Studying in Canada provides international students with access to work permits during study and for three years upon graduation, as a pathway to permanent residency, said President of Ryerson University Mohamed Lachemi. Immigration pathways should continue to be improved and expanded to allow for more diverse international students. Ryerson sought to ensure that the perspectives and experiences international students bring are recognised, valued and supported.
Swedish universities need to expand services and support for international students, said Torbjörn von Schantz, vice-chancellor of Lund University. Sweden’s national application system should be optimised for international applicants, along with certain migration processes and rules. Swedish universities have a range of services and activities for international students, and need to tackle priorities related to accommodation and alumni relations.
Recent US visa process revisions have thrown up difficulties, and President Elizabeth J Stroble said Webster University was using its international campuses to mitigate these challenges and build pathways for international students. Ashish Vaidya, president of Northern Kentucky University, called for reform that incentivises skill-based immigration along with corporate partnerships. “We have seen that successful strategies for domestic under-represented, first generation, and low-income students also translate well for international students.”
Youmin Xi, executive president of Xi'an Jiaotong-Liverpool University in China and pro-vice-chancellor of the University of Liverpool, said China needed to define clear and transparent policies and, for example, to offer longer duration post-study work visas. It must be recognised that educational and cultural practices outside China are different. Courses in English and support services are crucial, and creating an international qualifications equivalency database has been useful.
Some further thoughts
International student mobility has been on a growth trajectory, with the bulk of mobility driven by students moving from lower- towards higher-income countries in search of better prospects. The proliferation of English-taught programmes in Europe and Asia brought new opportunities for international students and new competition for English-speaking destinations.
Two step migration policies focus on enabling the retention of international student graduates as a skilled migration elite representing a highly acceptable human capital resource to governments and employers, and a “palatable option for countries with ambivalent views on migration”. For the OECD there is a 25% ‘stay rate’ among international students.
But future mobility faces serious threats due to lower prospects for work and the rising living and tuition costs of overseas education. “A sustainable growth scenario for globally mobile students requires aligning national policies and institutional strategies and creating pathways to attract and retain global talent by offering value for money.”