How to attract foreign students

International student mobility can be good for migrating students, their home country, the host country, and those remaining at home

Royal Holloway, University of London, UK, and IZA, Germany

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Elevator pitch

To expand the skilled workforce, countries need to attract skilled migrants. One way of doing this is by attracting and retaining international students. Empirical evidence suggests that concerns about brain drain—that is, the emigration of highly qualified workers—are overblown and that student migration can positively affect economic growth in both sending and receiving countries. However, migrants themselves reap most of the gains, through higher earnings. So that in the end, international student mobility can be beneficial for all participants: migrating students and those who remain at home, as well as home and host societies.

Global demand for higher education

Key findings

Pros

International student migration can foster economic growth in both home and host countries.

International student migration results in higher wages for the migrants.

Eliminating visa restriction increases both the number and the quality of incoming international students.

Cons

Some sending countries are at risk of brain drain, and their economic growth can falter as a result of student migration.

Sending countries incur fiscal costs because of the (temporary) absence of a skilled workforce.

Host countries face some fiscal costs by subsidizing international students, especially in countries where education is paid out of general taxation.

Author's main message

While both home and host country economies can gain from student migration, individual migrants gain the 
most. Attractive destinations have high-quality programs taught in English, provide large returns to skills, and have strong economic growth and open labor markets. Policies that harmonize qualifications and improve the job market for skilled graduates can also increase student migration. A large fraction of students return home, however—especially when the home economy is booming, returns to skills are high, and wages are based on individual productivity.

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