Study Shows Foreign Students Hugely Benefit UK Economy

Study Shows Foreign Students Hugely Benefit UK Economy

Foreign Students in UK Do Not "Steal" Jobs from Locals

A new study has shown that international students who stay in the UK contribute £3.2 billion to the British treasury in extra tax revenue over a period of 10 years. It also put paid to the misconception that non-British graduates take away jobs from local residents.

"Government's Biggest Mistake in HE Was to Discourage Foreign Students from Coming Here"

The research was done by the Higher Education Policy Institute (HEPI) and the consultancy London Economics. The director of HEPI, Nick Hillman, said: "Universities firmly believe the government’s biggest mistake in higher education has been to discourage international students from coming here. A hostile environment has been in place for nearly a decade. It is a testament to the strengths of our higher education sector that the number of international students has not fallen, but it is an absolute tragedy that we have been unable to keep up with the pace of growth in other countries."

The analysis shows international graduates who find employment in the UK typically do so in sectors that suffer from acute skills shortages. Rather than displacing domestic graduates, international graduates are plugging skills shortages.

The study also measures the impact of the Home Office limiting post-study work rights in 2012. This costs the Treasury £150 million each year in foregone receipts – that is, £750 million every five years or just over £1 billion since post-study work was first restricted in this way in 2012.

Additionally, their research shows the tax and National Insurance payments of just one cohort of international students who stay in the UK to work after their studies amount to £3.2 billion. This is made up of:

• over £1 billion in income tax
• over £700 million in employees’ National Insurance Contributions
• over £800 million in employers’ National Insurance Contributions
• nearly £600 million in extra VAT payments

Graduates from other EU countries who stay in the UK to work contribute £1.2 billion and graduates from the rest of the world contribute £2 billion.

Hillman also said: "The Home Office used to say there is insufficient evidence to show international students bring benefits to the UK. We proved this to be false last year, when we showed international students contribute £20 billion a year net to the UK. But, afterwards, the Migration Advisory Committee claimed there was still a lack of evidence to show international students who stay in the UK to work make a positive contribution."

WUP 8/4/2019
by James Wittenborg
©Wittenborg University Press

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