On the importance of macroeconomic factors for the foreign student’s decision to stay in the host country

The paper tests empirically whether the macroeconomic variables suggested by migration theories have a significant impact on the foreign student’s decision to stay in their host country. The analysis is based on the combination of country level macroeconomic variables and individual micro-level data. The entire population of post-graduate students who immigrated to Denmark after the enlargement of the European Union in 2004 is studied. The difference in mean labour income between the home and the host countries is found to be significantly and negatively related to the foreign student’s decision to stay in their host country. Moreover, the more hierarchical society in the home country is, the lower probability of male students staying in the host country. The differences in the unemployment rates, welfare benefits and business cycles between countries do not significantly affect the student’s probability of staying. The employment outcome of student migrants has also been analysed and it is positively related to English language knowledge, but not to the abovementioned macroeconomic and culture related variables.