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New study reveals economic benefits of international graduates to the UK

22 Mar 2019 - Fiona Raleigh

New research has revealed how much the UK gains from international students who graduate from the UK higher education system and stay in the country to work.

The study, commissioned by Kaplan International Pathways and the Higher Education Policy Institute (HEPI), and carried out by London Economics, gives a detailed analysis of the financial contributions of international students who stayed in the UK after finishing their degree.

The report’s findings

According to the report, the UK’s tax revenues from just one cohort of international students staying in the UK to work after their studies amounts to £3.2 billion.

This is a huge figure and it is made up by students from all over the world: graduates from other EU countries who stay here to work contribute £1.2 billion and graduates from the rest of the world contribute £2 billion.

Breakdown of £3.2 billion contributions

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

In addition to the economic advantages detailed in the report, there is the benefit that international graduates bring to the UK’s workforce. The study shows that international graduates who find employment in the UK typically work in sectors that suffer from skills shortages. Interestingly, this demonstrates that rather than taking the place of domestic graduates, international students are filling skills gaps in certain industries.

In 2012, the UK government limited post-study work rights for international students, and this study also measures the impact that this decision has had in recent years. The report shows that the number of international students arriving in the UK is not growing as quickly as it should be, and that compared to other countries, there has been a real slowdown.

Nick Hillman, Director of HEPI, said:

“Universities firmly believe the Government’s biggest mistake in higher education has been to discourage international students from coming here… 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.”

Evidence in this study suggests that the cost to the UK of restricting post-study work rights has been just over £1 billion since 2012.

Reactions to the report

There has been widespread support for the study on social media, with many industry figures taking to Twitter to highlight its findings.

Linda Cowan, Senior Vice President of Kaplan International Pathways, commented:

“We now have evidence that one of the many ways international students contribute to our economy is by filling skills shortages… We should be doing everything possible to encourage [international students] to stay and work here. To do this, we need to reinstate attractive and competitive post-study work rights for all international students.”

This comes at a time when the Migration Advisory Committee (an independent public body that advises the Government on migration issues) has published a report proposing to set the salary threshold for international graduates hoping to stay in the UK at £30,000. Linda went on to say:

“… an unrealistic salary threshold would undoubtedly make us even less competitive. This places real risk to the UK of losing the significant economic, educational and soft power benefits this country has enjoyed for many years.”

To find out more about the effects international graduates have on the UK, you can read the report by following the link below.

 
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