The benefits and costs of international higher education students to the UK economy

With 679,970 international students studying for qualifications at higher education institutions across the United Kingdom - equivalent to 24 per cent of all higher education (HE) students in 2021/22 - international students contribute significantly to our economic and social prosperity, both in the short term during their studies as well as in the medium to longer term after they graduate. Given the continuing importance of international students as a source of export revenues, alongside the ongoing political debate relating to potential visa restrictions for international students' dependants and potential reductions in their post-study work visa rights, London Economics were commissioned by the Higher Education Policy Institute (HEPI), Universities UK International (UUKi), and Kaplan International Pathways to update previous analysis of the benefits and costs to the UK economy associated with international students.

Following two previous studies estimating these impacts for 2015/16 and 2018/19 [available in VOCEDplus at TD/TNC 145.1003 and TD/TNC 145.1002], the analysis updates the previous results by focusing on the cohort of international students who started higher education qualifications in the UK in 2021/22. Mirroring the approach applied throughout our previous analyses of this type, we estimate the economic benefits of international students in terms of: (1) The tuition fee income generated by international students studying in the UK, as well as the knock-on (or 'indirect' and 'induced') effects throughout the UK economy associated with UK universities' spending of this international fee income on staff, goods, and services; (2) The income associated with the non-tuition fee (i.e., living cost) expenditure of international students, and the subsequent knock-on (indirect and induced) effects of this expenditure throughout the wider economy; and (3) The income associated with the spending of friends and family visiting international students whilst studying in the UK. Again, this expenditure leads to subsequent knock-on (indirect and induced) effects throughout the UK economy.

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