International student mobility and high-skilled migration : the evidence

Using information from the UNCTAD, we construct a new balanced panel database of bilateral international student mobility for 150 origin countries, 23 host countries, and the years 1970-2000. We match these data with information on bilateral stocks of international migrants by educational attainment from census data, available for 1990 and 2000. We estimate a theory-founded gravity model by conditional fixed effects Poisson Pseudo Maximum Likelihood to investigate the question: To what extent do countries that attract foreign students benefit from an increased stock of educated foreign workers? We find that, on average, an increase of students by 10 percent increases the stock of tertiary educated workers in host countries by about 0.9 percent. That average effect is, however, entirely driven by Anglo-Saxon countries. On average, our results imply a student retention rate of about 70 percent. These results suggest that the costs of educating foreign students are at least partly offset by increased availability of foreign talent.