Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen Head of Section Danish Agency for Universities and Internationalisation Ministry of Science, Innovation and Higher Education Macroeconomic benefits of attracting international students Helsinki, September 24, 2013

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen The Reason

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen Increasing number of international students in Denmark

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen The yearly intake of international students Nordic Other EU/EEA Non-EU/EEA Total

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen Retention and employment Year of Graduation After 1 year After 2 years After 3 years Year of Graduation After 1 year After 2 years After 3 years Retention Employment

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen A need for more knowledge Existing knowledge: 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)

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen The Model

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen 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

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen 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. The DREAM model - II

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen 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.

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen The Analysis

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen Three experiments A. An annual increased influx of 1,000 immigrants from Western countries with Bachelor’s degrees; all of whom are accepted for Master’s programmes and where the Danish state finances the educational costs. B. An annual increased influx of 1,000 immigrants from non- Western countries with Bachelor’s degrees; all of whom are accepted for Master’s programmes and where the educational costs are borne by the student based on tuition fees. C. An annual increased influx of 1,000 immigrants from Western countries with Bachelor’s degrees; all of whom are accepted for Master’s programmes and where the educational costs are borne by the student based on tuition fees.

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen 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

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen Variation relative to the baseline in the primary public balance, 2011 level

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen Labour Force and GDP effets Change in population and labour force Change in GDP

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen Validity Analysis can be seen as slightly conservative Models the whole group of western and non-western immigrants in the relevant age and education bracket Does not take productivity effects into account Level of education and demographics not directly linked The main conclusion of the analysis, that attracting international students is socioeconomically beneficial, is however viewed to be fully valid.

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen The Usage

Ministry of Science, Innovation and Higher Education 24 september 2013 Helsinki Jonas Husum Johannesen 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