International students – Do we really want less?

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In the post-Brexit era, a number of previously subdued discussions and ideas came to the fore which attempted to address the concerns of the general public revealed by the referendum. Amongst these is immigration. And within that, there are considerations of reducing the number of international students to universities. In this post, I’m adding my voice to those thinking this is a bad idea.

The disclaimer here is along the lines “okay, you work at a university, of course you will be against”. However, I will not argue for the impact on universities – the generators of that £10.7bn international students bring to the UK economy. In fact, I believe higher education will be the least affected, like it was during the 2008 recession. The reason for this is that despite several universities not being model business leaders, they are highly innovative. Many universities have already established agreements with institutions abroad for the delivery of their courses. These are expected to increase anyway due to the high income and reduced capital investment needed. So, even if nothing else happens, any restriction on international students will intensify this process. This is not to say that universities will not take a hit, but the odds are on their side in the medium to long term and in reality they have much bigger (and harder to solve) problems to face.

Unfortunately, I fear this is not the case with the British economy and society which flourished on the basis of its tolerance and acceptance of the other, attracting the best from around the world. Numerous academic papers discuss the impact of immigration and predominantly find positive effects to the economy. Examples can be found here, here and here. The main arguments revolve around increases in skills and skill complementarity as well as greater than average labour market participation. Beyond that, migration provides diversity. City-REDI’s Max Nathan identifies the positive links of that diversity to firm-performance and the economy here and here whilst Catherine Harris examines their entrepreneurial experience and performance.

But even if you are against immigration or in favour of its reduction, international students are not the group to target. Let’s not forget that international students who graduate from UK universities and enter the labour market have been schooled in their home countries. This means that the UK economy benefits from these workers without having to pay for their basic human capital which is upwards of £5000 per pupil per year. Thus this is a net benefit to the skilled workforce that the advanced economy in the UK needs. On top of that, international students have lower than average usage of public services such as health services (for which they pay a £150/year contribution) and very few of them overstay their visas. Hence, it comes as no surprise that they are among the most preferable immigrants to the UK and often not considered as such.

In terms of their direct economic impact, the Universities UK parliamentary briefing provides a very informative overview of figures estimating the contribution of international students to the economy.

More locally, using the University of Birmingham impact report, my calculations show that for 2014-2015, the 33,230 international students in the West Midlands Combined Authority (1.17% of the local population) have generated upwards of £800m of spend, £50m of taxes and created or safeguarded 3,700 jobs in the area. And these figures do not account for the impact coming from the universities’ capital spend using international students’ fees.

Concluding, it appears that there are no good arguments in reducing the numbers of international students and this includes the “student quality” concerns voiced. Universities have entry requirements for all students and these adhere to the standards of quality assessment criteria. If the target is to recruit better students, then this becomes a different discussion but I do not see why entry criteria (beyond language) should be different for home and overseas students if what we want is the best. The economic and social benefits outweigh their costs, and their impact to local economies would be too big to miss.

All in all, it would be a shame in the name of producing headlines and hitting targets of reducing migration to jeopardise the flow of international students to the UK.

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