A recent analysis by the German Economic Institute (IW) has revealed that Germany recovers its investment in educating and supporting international students, with a remarkable eight-fold return. The study, commissioned by the German Academic Exchange Service (DAAD), highlights the economic benefits of hosting international students in Germany.
According to the analysis, every year of international students contributes around eight times more to the revenue of public budgets in the long-term than the state invests in them. This means that if 40% of the foreign student cohort remains in the country after graduation, their taxes and other contributions to the German economy will cover the costs of their education within three years of graduation.
The study estimates that each new cohort of international students contributes a net of €15.5 billion over their lifetime, assuming a retention rate of 40%. Even with a retention rate of 30%, the income would exceed expenditure by €7.4 billion in the long term. If 50% of a cohort were to remain in Germany in the long term, the surplus would amount to €26 billion.
The analysis emphasizes the importance of international students in strengthening Germany’s economy. “Investing in the education of international students strengthens the skilled labor base and thus economic growth in Germany in the long term,” said IW Director Prof Dr Michael Hüther. “They help to overcome the challenges of demographic change.”
Germany has seen steady growth in its foreign enrollment in recent years, with an estimated 405,000 international students currently in the country. According to a recent survey, 65% of students intend to stay in Germany after graduation. The OECD has reported that Germany has the highest retention rate of international students among leading study destinations, along with Canada.
The analysis by the German Economic Institute highlights the economic benefits of hosting international students in Germany. With an amazing eight-fold return on investment, it is clear that international students are a valuable asset to Germany’s economy.
