Relationship Between Economic Activity and the Size of the International Student Population in OECD Countries

Abstract

Education has become a global business and tertiary education is the biggest contributor. From 1975 to 2011, the number of international students enrolled in tertiary education among the OECD countries grew from 0.8 million to 4.3 million. This paper analyzes the relationship between the level of economic activity and the size of the international student population in OECD countries. The major finding is that both GDP per capita and real wages are positively related to the size of the international student population in a country. One of the main reasons may be that economic growth results in better educational resources and quality as well as better job markets, which are crucial factors affecting the decisions of international students in terms of where to apply. This study suggests that during periods of economic growth, policy makers should relax their immigration policy to fulfill increasing demand of international students. Immigration policy should also be modified during the economic downturn to overcome the contradiction between increasing demand of domestic students and decreasing educational funding.