International students boost Dutch economy more than they cost, says CPB

While the Netherlands may have to spend money on international students, new research has shown that they more than make up for it, benefiting the economy and alleviating worker shortages. 

International student contributions to Dutch economy outweigh costs

The Netherlands Bureau for Economic Policy Analysis (CPB) conducted a study at the request of the Ministry of Education, Culture and Science to determine the costs and benefits of international students in the Netherlands. Overall, the study found that foreign students have a net positive contribution to the country’s finances.

Students from the European Economic Area (EEA), which includes the EU countries as well as Norway, Iceland, and Liechtenstein, may cost the Dutch government money through student finance, social security, and healthcare. But these costs are more than recouped later through tax revenues, according to the CPB study. 

However, non-EEA students make the largest contributions because they fully fund their own studies, costing the Dutch government little to no money. They are also more likely to stay in the Netherlands after they graduate, earn more on average and therefore pay more income tax. 

More students stay in the Netherlands after graduating 

International students are choosing to stay in the Netherlands after completing their studies more and more often. Five years after graduating, one in five EEA students and two in five non-EEA students are still in the Netherlands. 

According to CPB, these figures were about a quarter lower 10 years ago. One of the main factors that could be encouraging foreign students to stay is the opportunities in the Dutch labour market. 

With the severe worker shortage in the country, and international graduates from Dutch universities earning more than their local peers, the advantages of staying are plenty. And with these educated residents entering the workforce, they help fill gaps in the labour market, ultimately benefiting the economy.

Little negative impact of international students

In the past few years, limiting the number of international students has been a topic discussed often, especially among the previous government, which wanted to cut their numbers to save around 300 million euros. Experts warned that this would negatively affect the Dutch economy, actually costing the Netherlands 4,8 billion euros. 

CPB programme leader Paul Verstraten is sceptical about limiting international student numbers. "The students who stay to live and work here after their studies make relatively little use of social services. They are usually highly educated, which results in a high labour force participation rate. Higher than that of the average Dutch person," he told NOS.

While the CPB stated that the influx of international students may put extra pressure on the housing market in the short term, the organisation does not expect a major impact in the long term. "In the long term, those effects are fairly limited because the market adapts," said Verstraten. "Whether and to what extent that actually happens depends, among other things, on the choices made by politicians."