University study abroad and graduates’ employability Updated

Positive association between study abroad and employment prospects

Numerous studies have documented a positive association between participation in study abroad programs and graduates’ job prospects. These studies rely on data from surveys of former participants in study abroad programs, information collected from international mobility managers of higher education institutions, and evidence from employer surveys.

A few surveys have tracked the post-university outcomes of students who have spent part of their university studies abroad. Information from these surveys has been used to explore graduates’ perceptions about how their study abroad experience affected their subsequent employment career. For instance, one study examines data from a 2005 survey targeted to European students who studied abroad during academic year 2000/01 through the Erasmus program (the Professional Value of Erasmus survey, or VALERA survey). More than half (54%) of surveyed students believed that their study abroad helped them secure their first job [2]. This suggests that the majority of former participants in international study programs consider a period of studying abroad to be a great addition to their resume, one that helps them stand out in the labor market.

Other studies are based on data provided by university international mobility managers. According to a survey conducted in the UK which relies on interviews with 11 mobility managers of several universities, participation in study abroad programs strongly enhances employability. One interviewee was able to report results from a survey of graduates who had spent one year abroad during their university studies: 87% of respondents stated that their experience abroad contributed to making their job interview more successful. Furthermore, 75% of respondents indicated that their current employer would be more likely to offer a job to someone who had studied abroad. Another interviewee was told by a chief executive of Lloyds TSB that the company looks for global graduates when it recruits employees.

Finally, some studies have examined the extent to which employers are attracted to applicants who have studied abroad. Using data from a survey of 230 employers in the UK, a 2007 study finds that 29% of the employers who responded feel that graduates with overseas study experience are more employable [3]. There is also evidence from Australia supporting the proposition that employers highly value graduates with overseas study experience. A 2006 survey of senior recruitment and human resource managers from more than 100 Australia-based multinational, national, and state organizations (commissioned by the Queensland Government and the International Education Association of Australia) finds that 60% of respondents believe that experience with overseas study provides a “unique, competitive” advantage to a graduate's resume. A recent study, based on a survey addressed to companies (with more than 50 employees) operating in 31 countries, concludes that a study abroad experience is principally valued in Southern Europe, Austria, Finland, Latvia, Luxembourg, and Turkey. Additional results indicate that the higher the share of foreign graduates in a company, the greater the probability that international study experience will be valued [4].

Employment-related advantages of studying abroad

Studying abroad may give students the opportunity to acquire a wide range of skills that enable them to compete successfully in the labor market. Many internationally mobile students are likely to become fluent in a second language. There is some evidence from the US that speaking a foreign language is rewarded in the labor market. Using a representative sample of US college graduates, one study finds a 2–3% earnings premium for employees who are bilingual. This result is robust to a variety of empirical strategies, including ordinary least squares (OLS) regressions with controls for cognitive ability, nonparametric methods based on propensity score matching (PSM), and panel data methods [5]. There are of course different premiums for different languages. For instance, in the US, speaking Spanish as a second language does not pay off as much as speaking German does. A similar result is obtained by a 2017 study looking at the returns to foreign language skills of Italian graduates who have spent some time abroad during their studies. Studying abroad is found to have a positive effect on foreign language acquisition, though there is an unequal distribution of labor market rewards across foreign languages. Being proficient in German is associated with a higher wage premium than being proficient in English, French, or Spanish [6].

While foreign language skills are often viewed as the most important benefit emerging from study abroad, there are many other advantages. Graduates who have spent some time overseas during their university studies are more likely to work effectively in a multicultural environment and may be more open to working in other parts of the world during their career. Intercultural competence and willingness to be internationally mobile are likely to be highly valued in a global economy. Former participants in international student exchange schemes are likely to be more flexible and open to change, enabling them to adapt to new situations, embrace different perspectives, and deal with ambiguity. Additionally, study abroad programs may enhance students’ confidence and self-awareness. While studying and living abroad, students have to deal with new and unexpected situations, which can help them become more confident, mature, and self-reliant.

An additional labor market advantage related to studying abroad is that it enables graduates to have a wider job search radius. Participation in study abroad programs allows students to acquire information on labor market conditions abroad and to make contact with relevant firms in foreign countries. Moreover, graduates may also rely on friends met during their study abroad experience to look for a job in a foreign country.

Employment-related disadvantages of studying abroad

While there are several reasons why study abroad is positively associated with graduates’ job prospects, there are also some possible negative employment-related consequences of this experience. Some of the knowledge and skills that students acquire while studying abroad may not be transferable to the labor market in their home country. For instance, internationally mobile students may become familiar with accounting and legal procedures that are used in the study abroad country but not in their home country.

Another possible disadvantage associated with studying overseas is that not all graduates are able to translate their study abroad experience into something employers value. In job interviews, employers sometimes get the impression that students pursue study abroad for the fun and excitement it offers rather than to pursue specific academic goals.

There is also evidence that studying abroad may negatively affect the transition from higher education to employment. Using a PSM method and data from 16 European countries, a 2013 study concludes that internationally mobile students take slightly longer to find a job than their peers who do not study abroad [7]. However, this effect holds only for students who have spent at least six months abroad, and it is significant in a few countries and in a few subjects of study. This result may be partly due to the greater difficulty of developing an employment network for students who are studying abroad. Participants in study abroad programs may find it harder to create and maintain social connections in their home country. Given that in many labor markets jobs are often obtained through informal channels, internationally mobile students may need to spend more time searching for a job. Another reason for the longer transition to employment after graduation for internationally mobile students is that they are more likely to continue their studies than their peers who did not study abroad.

Study abroad and an international career

Studying abroad may be especially beneficial for students who are willing to pursue an international career. Many students decide to study abroad because they view this experience as an opportunity to develop an internationally oriented career. However, not all participants in international student mobility programs are determined to pursue a globally oriented career before they go overseas. An education abroad experience may actually induce some students to do so.

Several studies report that former participants in study abroad programs are more likely to be employed in multinational companies and work overseas than their non-internationally mobile peers. A survey conducted by the Institute for the International Education of Students finds that nearly half (48%) of US students who study abroad during at least part of their university years report working in a globally oriented position at some point after graduation. Similar evidence for European students emerges from the VALERA survey. Graduates who study abroad through the Erasmus program are found to be more likely than other students to work in internationally oriented organizations and carry out work tasks with an international component. More precisely, compared with workers who have no international study experience, former Erasmus participants are more likely to be sent abroad for work assignments, more likely to travel to other countries on business, more likely to use foreign languages in professional situations, more likely to use information about other countries in their work, and more likely to work with colleagues or clients from other countries. This finding is also consistent with that of a recent study using a factorial survey experiment in an attempt to explore the value of international student mobility in hiring decisions from an employer's perspective. Vignettes of hypothetical candidates with systematically different higher education credentials were randomly presented to a sample of German employers in a simulation of a recruitment and selection process [8]. The results indicate that an international study experience is important when employers are looking to fill a position abroad.

In line with the idea that studying abroad enables graduates to have a wider job search radius, a few studies provide causal evidence of the positive influence of participation in international student exchange programs on graduates’ likelihood of working in a foreign country. Two of these studies, which rely on a similar identification strategy, look at German and Italian graduates [9], [10]. The German study focuses on the effect of the Erasmus program, while the Italian study analyzes the impact of all student exchange schemes. The two studies reach similar conclusions: studying abroad increases the likelihood of later working abroad—by 15 percentage points for German students and by 18–24 percentage points for Italian students—compared with students who have not studied abroad. Another study using data on Dutch university students employs a regression discontinuity design to account for the endogeneity of the decision to study abroad [11]. It exploits the rules governing the selection process of a particular scholarship program where applicants are ranked according to several criteria. Only those applicants ranked above a given cut-off receive a scholarship to study abroad. The intuition behind this regression discontinuity design is that the probability of getting the scholarship can be thought as a random event for those applicants whose ranking is close to the corresponding cut-off. The empirical findings suggest that studying abroad raises the probability of working in a foreign country by approximately 50 percentage points. There are two possible reasons for the wide differences in the magnitude of the effect related to studying abroad. First, while the German [9] and Italian [10] studies use a nationally representative survey of university graduates, the Dutch study [11] employs a small sample of particularly talented students. Second, the German and Italian studies examine the impact of undergraduate studies abroad, while the Dutch study investigates the effect of postgraduate studies abroad.

In line with expectations, there is also evidence that the probability of working abroad following graduation is positively related to the duration of the international study experience. The more time spent studying at a foreign university, the higher the likelihood of later having a job in a foreign country. One study finds that for European students who have spent 12 months abroad, the probability of them working in a foreign country within five years of graduation is more than double that of their peers who have studied abroad for three months [7].

Finally, there is descriptive evidence from Germany that internationally mobile graduates tend to return to the country where they studied abroad [9]. The reason for this choice is that while studying abroad, students are likely to acquire skills and knowledge (such as language skills and personal contacts) that are generally more relevant in that labor market than elsewhere.

Accounting for unobserved characteristics of students who study abroad

A major challenge of research investigating the employment effect of studying abroad is that it should account for the possibility that unobserved individual characteristics driving the decision to participate in international student exchange schemes might be correlated with subsequent employment outcomes. There are at least two sets of arguments suggesting that students who study abroad are weaker on unobserved dimensions that may be related to future labor market opportunities. First, many students decide to study abroad not because they want to gain competence in academic and professional domains but because they are looking for adventure and excitement. Second, it is also possible that some students view the study abroad experience as an opportunity to put less effort into their education since examinations tend to be easier in study abroad programs. International exchange students may receive special treatment, which can improve their odds of passing exams and getting higher grades. Additionally, students may intentionally choose study abroad programs with lower examination standards than their home university. For example, in one Italian university several student exchange links with international higher education institutions were suspended following an investigation that found that many students were choosing these destinations because of their lower examination standards.

On the other hand, the decision to spend some time abroad during university studies can be associated with unobserved student traits that positively affect labor market outcomes after graduation. In line with this consideration, one study, using data from a large sample of first-year US college students, finds that the intention to study abroad can be positively predicted by factors such as openness to diversity in ideas and people, interest in writing and reading, diverse interactions while in college, and participation in extracurricular activities [12].