Abstract
This paper analyzes the demand for UK educational services by international students through investigating the demand for student visas to the UK from 89 developing countries covering the period 2001 to 2008. The substantive findings of this research are that bilateral exchange rates matter more than per capita income in the source country in driving the volume of applications. An analysis of the country-specific fixed effects suggests a higher demand for visa applications from Muslim countries, from countries sharing a common language with the UK, and from countries geographically proximate to the UK. Political stability within developing countries and their formal human capital levels are also found to be important factors determining the volume of visas issued. C23, F14, F22, I29
Highlights
The UK has the second largest number of international students enrolled in higher education after the USA
Data for 2008/09 from the Higher Education Statistics Agency (HESA)2 reveal that international student enrolments grew by 9.4% compared to 4.9% for non-UK European Union (EU) students, and 3.2% for UK students3
A British Council (2010) report, covering the fiscal year 2009/10, estimates that the number studying on English Language courses in the UK in any given year could be as high as half-a-million and calculates that the English language tuition industry is currently worth somewhere between £3 billion and £4 billion per annum to the UK economy
Summary
Statistics from the Office for National Statistics reveal that both presently and in the past, student migration has constituted the least significant portion of migration outflows from the UK Given such low demand for education by UK students in the countries represented in our study, the gravity approach would obviously be an unsuitable choice of empirical modelling for the current application. The proportion of the country’s population that is Muslim is included to determine the relationship between Muslim countries and the international demand for UK educational services The realisations for this particular variable are likely to change imperceptibly over the short period of time covered by this study and its approximate treatment here as timeinvariant appears fairly innocuous.
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