Argument: Foreign students benefit countries economically

Supporting quotes from the Economist debate series

  • Frances Cairncross. Economist Online Debate Series. Proposition Opening Statement. December 7th, 2007 – “For some countries, this has become a sizeable source of revenue. In countries where universities have comparative freedom to act competitively and, as in the case of Britain and Australia, to set higher fees for foreign than for domestic students, higher education has become a notable export industry. The OECD collects data on tuition fees and living costs. Only a few countries yet report on these flows but the numbers are big. For 2005, the United States had a net inflow of some $10 billion (around one-third of total net travel flows). In Australia and Britain, they amount to around $6 billion, a significant contribution to the current-account balance.
Indeed, where foreign students account for the largest share of enrolments, as in Australia and New Zealand, exports of educational services ranked third in terms of total services exports in 2003. For some regions, the presence of foreign students matters even more. In Britain, overseas students pay considerably higher tuition fees than national students. In September this year, the British Council published a path-breaking study of the regional impact of international students. It found that they had a substantial impact on some relatively poor regions, bringing, for instance, £134m a year into the local economy of the North West in tuition fees alone. And that does not count their spending on rent, subsistence – and beer.”
But student fees and spending are not the only – or even the most important – gains to countries that attract the brightest and “best. There are two other gains. First, it is at university that young people build the first network of contacts that will see them into their careers. In the course of doing – say – a doctorate, students will meet people in their field of specialism, and will use equipment and consult books produced in the country where they study. When they return to their own country, these contacts and experiences will continue to influence them in many subtle ways; and when, in time, they control substantial budgets, will direct their purchasing and investment decisions.
Secondly, a significant proportion of foreign students remain for at least part of their career in the country that has educated them. Sometimes, this is deliberate: a student visa offers a much higher chance for a youngster from a developing country to gain permission to enter a wealthy country than does any other immigration path; and, once educated, a better chance to be allowed to stay on as a skilled migrant. But, deliberate or not, the impact on the receiving country’s competitiveness may be disproportionate. The high-technology industries of California have thrived to a great extent thanks to the supply of clever Chinese and Indians, many of whom first came to the state to study at one of its outstanding universities.
  • Ertan Ergezen, guest student’s comments. The Economist Debate Series: Education. Dec 19th 2007 – “Economic dimension of this issue should not be ignored. According to a study by the Association of International Educators (NAFSA), the net economic contribution of international students to U.S. economy was around $14.5 billion in 2006-2007. The state of Pennsylvania received $660 million and the University of Pennsylvania, one of the biggest universities in the state, got around $120 million.”