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Jonas Husum Johannesen Head of Section Danish Agency for Universities and Internationalisation

Macroeconomic benefits of attracting international students Helsinki, September 24, 2013. Jonas Husum Johannesen Head of Section Danish Agency for Universities and Internationalisation Ministry of Science, Innovation and Higher Education jhj@ui.dk. The Reason.

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Jonas Husum Johannesen Head of Section Danish Agency for Universities and Internationalisation

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  1. Macroeconomic benefits of attracting international studentsHelsinki, September 24, 2013 Jonas Husum Johannesen Head of Section Danish Agency for Universities and Internationalisation Ministry of Science, Innovation and Higher Education jhj@ui.dk

  2. The Reason

  3. Increasing number of international students in Denmark

  4. The yearly intake of international students

  5. Retention and employment Retention Employment

  6. A need for more knowledge • Existingknowledge: • Attracting international students and recruiting from the Study in Denmark initiative (input) • Student satisfaction and perception of studying in Denmark (process) • Retention and employment (output) • No knowledge: • Long term effects of international students (outcome)

  7. The Model

  8. The DREAM model - I • Danish Rational Economic Agents Model • Based on registry data from Statistics Denmark • The DREAM system is used to evaluate the long-term development of public finances in Denmark • The central question is whether the fiscal policy is sustainable based on two variables: the future revenues and future expenditures of the public

  9. The DREAM model - II • The total DREAM system consists of three pre-models: • · The population projection model, • · The education projection model, • · The socioeconomic projection model, • They feed into: • · The DREAM economic model.

  10. Example of calculation • 5000 immigrants are introduced into the population model • In the education model they are assigned a level of education • In the socioeconomic model they are assigned a labor market category • In the DREAM economic model, public finances are calculated for the alternative population development with 5000 additional immigrants.

  11. The Analysis

  12. Three experiments • An annualincreasedinflux of 1,000 immigrants from Western countries with Bachelor’sdegrees; all of whomareaccepted for Master’s programmes and wherethe Danish statefinances the educationalcosts. • An annualincreasedinflux of 1,000 immigrants from non-Western countries with Bachelor’sdegrees; all of whomareaccepted for Master’s programmes and where the educationalcostsare borne by the student based on tuitionfees. • An annualincreasedinflux of 1,000 immigrants from Western countries with Bachelor’sdegrees; all of whomareaccepted for Master’s programmes and where the educationalcostsare borne by the student based on tuitionfees.

  13. The results • Overall, the analysis shows that there is a socioeconomic benefit in attracting international students to study a full Master’s programme, even if the programme is financed by the Danish state • Experiment A (No tuition – western) lead to a lasting annual increase of the primary public budget of DKK 0.75 billion • Experiment B (Tuition – non-western) lead to an annual increase of DKK 0.36 billion • Experiment C (Tuition – western) lead to an annual increase of DKK 0.79 billion

  14. Variation relative to the baseline in the primary public balance, 2011 level

  15. Labour Force and GDP effets Change in population and labour force Change in GDP

  16. Validity • Analysis canbeseen as slightlyconservative • Models the wholegroup of western and non-western immigrants in the relevant age and educationbracket • Does not takeproductivityeffectsintoaccount • Level of education and demographics not directlylinked • The mainconclusion of the analysis, thatattracting international students is socioeconomicallybeneficial, is howeverviewed to befully valid.

  17. The Usage

  18. Usage • Often cited in media when international students are discussed • Have been confirmed by different economic experts • Used politically in support of international students coming to Denmark to study • Has been an important input in the discussion concerning the ECJ-ruling on access to SU

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