On the benefits of an international education

Universities encourage study abroad programs because it is a good experience for students to learn about others cultures (and in the case of expensive colleges, a cheap way to make money while students continue to pay tuition). With the Erasmus program in Europe where local tax payers typically foot most of the bill for higher education, the question arises whether it is worth paying for the education of foreigners. Of course, there is a chance that they would stay and thus only one year of all their education has been paid. And this does not necessarily have to be a zero-sum game, as the international education should be enhancing. Oh, and the Erasmus program also seeks to establish more pan-European ties, so there is a political motive at least.

Jan Bergerhoff, Lex Borghans, Philipp Seegers and Tom van Veen try to look into the impact of international higher education using the Lucas growth model. Students study abroad if they find it in their interest, which in this model means that they can benefit from higher human capital in the other country, implying a faster human human capital accumulation the more foreign students there are. The probability the students are staying is then exogenously calibrated. The authors find that the impact on growth rate should be positive, while still modest at current internationalization rates. on a personal level, i can only recommend study abroad, it has certainly helped me, even though my host country probably did not get much out of it.