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ARCHIVED - Economic Impact of International Education in Canada - An Update
Table of Contents
- Executive Summary
- 1. Introduction
- 2. Methodology
- 3. Literature Review
- 4. Number of International Students in Canada
- 5. Student Expenditure
- 6. Assessing the Economic Impact of International Education in Canada
- 7. Additional Benefit from Tourism Activities
- 8. Canada’s Performance in the Global Market
- 9. Conclusions and Recommendations
- Appendix 1 Reconciliation of RKA Estimates with Valuation by Statistics Canada
- Appendix 2 Scenario Analysis
3. Literature Review
In this Section, we look at the literature on topics and issues related to international education in Canada. The purpose of this is to provide an overview of background information that relates to trends and patterns of international education, especially those identified in recent studies.
Defining International Education
"International education may involve formal or informal academic, cultural, employment, travel or volunteer experience abroad with return to the native country; hosting international education programs and students; internationalizing domestic courses, programs and curriculum; and exchange programs for students, researchers, citizens and employees provided by government, non-profit, educational, or employer provided programs." (Conference Board of Canada 1999)
The Council for Higher Education Accreditation's Sharing Quality Education Across Borders: A Checklist for Good Practice, highlighted a number of important issues, including:
- "the need to safeguard the broader cultural, social, and economic contributions of higher education and research; protect the interests of students and facilitate their mobility; and strengthen the capacity of developing countries to improve accessibility to high-quality higher education"
- key elements – contribution to the public good (social, economic, and cultural), capacity building (cooperation and collaboration), relevance (current and recognizable), accessibility (financial), quality (institutional, administrative, faculty), accountability (authorization and organizational memberships), and transparency (public information, admission policies, and appeals procedures), and commitment to high-quality standards (codes of good practice)
International Student Mobility Comparison
“International student mobility is one of the cornerstones of the growing internationalization of Canadian universities. It encompasses both international students attending Canadian institutions and Canadian students going abroad for academic credit while registered at a Canadian institution. Both streams have a great impact on our universities and, ultimately, on society as a whole. Likewise, both present complex challenges to university officials and policy-makers who share the goal of raising the levels of international student mobility.” (Association of Universities and Colleges of Canada (AUCC) 2007, page 1.)
It should be noted that in the general international student mobility picture, there is another component to outgoing student mobility in addition to “Canadian students going aboard for academic credit while registered at a Canadian Institution”. This is the number of Canadian students registered in a country other than Canada pursuing formal and informal education.
AUCC conducted an internationalization survey in 2006 to seek insight on the current status of Canadian student mobility and international students in Canada. Findings from the survey suggested that, within the university community, there is a growing interest in, and engagement with, international student mobility. Its value is also increasingly recognized. Survey responses showed that although there are differences at the level of individual institutions, on average there has been steady progress on the overall rates of student mobility, including modest growth in the number of Canadian students undertaking short-term study abroad for credit, as well as significant growth in international student recruitment to Canadian universities.
About 2.2% of total full-time Canadian students have participated in a form of study abroad for credit in 2006 – an increase from the approximately 1% of students who studied abroad in 2000. The number of international students on Canadian campuses has grown rapidly to approximately 70,000 full-time and 13,000 part-time students in 2006.
The number of Canadian students studying abroad at the post-secondary level has also been growing. In 2007-2008, UNESCO reported 45,000 Canadian students studying abroad, a 50% increase since 1999 (UNESCO 2010). The top five international destinations for Canadian students in that academic year were the United States, the United Kingdom, Australia, France and Ireland. Together, they attracted 90% of Canadian students studying abroad.
Although these figures may have appeared promising, the proportion of Canadian students studying abroad is low in comparison with many OECD countries. On recruitment of international students to Canada, Canada faces significant international competition in the years ahead for our share of the international student market.
Globally, student migration has grown faster than overall migration: the US and the UK are the top destinations for degree mobility (where the student moves abroad for an entire degree course), while China and India are top source countries (King et.al. 2010). Over the period from 1975 to 2006, Canada’s students studying abroad for credit or degree have grown 207%, but Germany’s has grown 424%, and France’s has grown 492%.
There are a number of barriers identified in Canada on why international student mobility has not grown faster than it has. The relatively low levels of Canadian students studying abroad as exchange students is mainly the result of lack of funds or financial support, followed by “the curriculum at the home institution being too inflexible or the program being too heavy” and “students lack the necessary language skills.”
AUCC survey results also indicated that Canadian universities’ overall internationalization activities, including international student recruitment, are hindered by financial constraints and an overall lack of a federal strategy to enhance internationalization effort.
Since the AUCC survey was conducted in 2006, many internationalization activities have been undertaken by Canadian universities in recent years, and support for internationalization has been provided by the federal “Edu-Canada” initiative launched in 2007.
The “Edu-Canada” initiative, funded with $1 million per year, sought to leverage DFAIT’s network of embassies and consulates to undertake promotion efforts and attract more international students to Canada. Under the “Edu-Canada” initiative, DFAIT also entered into a partnership with the provincial and territorial governments via the Council of Ministers of Education, Canada, to launch and jointly manage Canada’s education brand.
The $1 million per year budget for “Edu-Canada” has been effectively managed to contribute to increased internationalization activities. The number of missions receiving funds to engage in promotional activities increased from 15 missions in 2006 to 95 in 2010. These missions are planning 170 promotional events in 2011. Stated objectives for the “Edu-Canada” initiative included a target of increasing the number of international students by 20% by 2012, which was achieved (increase of 28.4% between 2006 and 2010). Further, there was a target set of increasing the international use of Canadian curricula by 10%, a goal which was also reached (increase of 21% between 2006 and 2011). Lastly, “Edu-Canada” sought to increase the number of agreements facilitating two-way student mobility, which was accomplished via “Edu-Canada’s” leadership in organizing Canada pavilions at Signature Events as well as focussed bilateral or regional roundtables to increase inter-institution agreements. Canadian institutions also increased their international activities which resulted in greater inter-institutional engagement.
Canada as a Top Educational Destination
Canada remains a very attractive destination for international students when they seek a suitable country for pursuing international education at the post-secondary level. In the Canada First 2009 Survey (CBIE 2009), over half of student participants in the survey (53%) replied that Canada was their first choice of destination for pursuing their post-secondary education. Almost all student participants said that they thought of Canada as a place to reach their educational potential.
Several factors influenced international students’ choice of educational institution, but the most important one appeared to be the quality of education the student would get from the relevant institution, followed by the availability of the desired program at that particular institution. From survey respondents, almost 9 students in 10 were satisfied with their decision to come to study in Canada, and over 80% said they would recommend Canada as a study destination to friends in their home country.
Most student participants report being satisfied with services and facilities they have used at their institutions. For example, about 8 in 10 students who had the relevant experience report being satisfied or very satisfied with the International Students Handbook, recreational facilities, international student advisors, and study skills and other learning support services.
These findings point to the success of the marketing of Canada as a top educational destination, as well as to the quality of international educational services offered in Canada’s post-secondary education and training system.
Cost of International Education
The way we measure the impact of international students on Canada’s economy is through the estimate of expenditure by international students during their stay in Canada. This is the way we measured such impacts in our previous study completed in 2009, as well as in other similar studies. Cost of education is one of the factors affecting an international student’s choice of study destination. In the Economic Impact of Post-Secondary International Students in Atlantic Canada: an Expenditure Analysis (Dalhousie University 2010), it was pointed out that historically, differential tuition levels and fees were introduced because several host countries were concerned about the rising cost of subsidizing students from abroad.
The Dalhousie University study also pointed out that, recently, Australian universities have reversed their stance on differential tuition fees, opting to take a more aggressive approach towards international student recruitment by introducing tuition waivers for graduate and post-doctoral students from other countries. The Council of Australian Postgraduate Associations has stated that fee waivers will likely become a trend as universities compete in the international student market; a sharp contrast to the previous attitude of universities trying to attract the maximum number of international students paying differential fees to boost incomes. New Zealand has also followed suit by removing differential tuition fees for international students enrolled in Ph.D. programs.
In Canada, however, with the exception of a few programs offered in the province of Quebec, differential tuition rates and fees paid by international students have existed since the 1970s and were increased substantially in the 1980s. Data shows that, in most provinces, international students at the undergraduate level pay an average tuition at least twice as much as that paid by domestic students, and in some cases, more than six times as much. International graduate students also pay more than their domestic counterparts. (See Table 1 and Table 2.)
|Prince Edward Island||4,530||4,969||8,940||22,846|
Source: Statistics Canada, Tuition and Living Accommodation Costs (TLAC) survey
|Prince Edward Island||2,665||4,091||6,148||7,913|
Source: Statistics Canada, Tuition and Living Accommodation Costs (TLAC) survey
Given the competition in the global international education market, educational policy makers may need to re-examine the practice of differential tuitions and fees. However, it is important to note that, for example, the 95 members of AUCC are public and private not-for-profit universities and university-degree level colleges. Therefore, the motive for differential tuition is not profit as the funds cover the full costs of international students’ participation.
Often, the preferred route for top talent is scholarships at the graduate level (both provided by universities themselves and some of the new federal government scholarships). These more than offset the tuition fees, yet draw less controversy (particularly when the domestic students can compete for the same scholarships).
Data Collection Practices
In conducting the literature review in our previous study, it became apparent that while many countries cater to a significant number of international students, few actively track the activities and spending patterns on a national basis. A recent study in Australia could have a significant impact on how national governments approach the issue of tracking the impact of international students. The Australian Education Sector and the Economic Contribution of International Students (ACPET, 2009) has determined that international students directly contribute over $14 billion (Australian dollars) to the Australian economy (and about $12.5 billion in indirect contributions) representing over 126,000 full time employees.
In order to collect this data, the Australian Council for Private Education and Training and its consultants used the Tourism Research Australia’s International Visitor Survey to determine the number of visitors who identified education as their purpose of travel and examined their spending patterns. The surveying of visitors (and the subsequent spin-off studies) has given the Australian education sector a significant advantage and could be the jumping off point for other countries committed to a comprehensive evaluation of the economic impact of international education.
The Institute of International Education (the leading not-for-profit educational and cultural exchange organization in the United States) has also done extensive work regarding the economic impact of students. In fact, they have given what seems to be a more tempered, and realistic, assessment of international students' economic impact as they have subtracted scholarships and financial assistance provided to international students from the total economic impact amount. The Institute has published an annual report (Open Doors) on international students in the U.S. since 1919. Open Doors also produces reports on surveys on international scholars at U.S. universities; international students enrolled in pre-academic Intensive English Programs; and on U.S. students studying abroad (since 1985). Its collection of data is through a survey of approximately 3,000 accredited institutions in the U.S.
However, it appears that the dollar figure that the Institute arrives at is still not entirely comprehensive as a) it is only based on tuition and living expenses – without mention of tourism or entertainment expenses and b) it would appear that language schools and other short term training institutes are not included in this study. In fact, the IIE partner site, the NAFSA: Association of International Educators, acknowledges that their impact figure is a conservative one.
In Canada, there is no readily available data set which provides detailed information on the number of international students or expenditure patterns. At the national level, Statistics Canada administers a survey to collect data on average tuition and fees as well as average cost of accommodation on campus. In another survey, Statistics Canada collects information on profiles of post-secondary institution graduates including age, registration status, gender, field of study, etc., and one of the variables can identify whether the student is an international student. Still, these datasets may not provide a comprehensive picture as not all post-secondary education institutions participate in the surveys.
Some provinces have compiled data on international students. Two recent studies on the economic impact of international education at a regional level are examples of such efforts (the studies by Dalhousie University and Kunin 2010). However, data collection methods differed in these studies and the level of detail on the types of students also differed amongst these studies. This again, points to the fact that there is still not a consistently defined and collected data set that is available across all provinces which will allow for comparison of such impacts.
One advantage of our current study over the previous one in 2009 is the availability of data on certain types of short term students (through Languages Canada) including the number of students as well as student week data. This will improve our understanding of this section of the international education market.
 This is the most recent figure that is available.
 The UNESCO Institute for Statistics defines internationally mobile students as those who study in a foreign country of which they are not a permanent resident – the report does not include students in short exchange programs of one school year or less.
 The TRA samples 40,000 foreign visitors as they leave Australia each year. Survey participants are interviewed in airports (in one of four languages – English, Mandarin, Korean and Japanese) and asked 96 questions that cover purposes of trip, expenditures, travel, accommodation, etc. The survey results are posted each quarter.
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