There is no stampede from study to permanent residence

International education is fair game in political debate.

Foreign students are coveted by universities for the revenue they bring in and by governments for the foreign exchange they earn. And they can create a pool of highly skilled immigrants who can be expected to adjust easily to the labour market and society.

But some New Zealanders complain that international education has acted as a back door to undesirable immigration. A crackdown by government agencies in 2016-17 found that some agents had signed up would-be migrants who then used their work rights to gain immigration points while doing as little study as possible. This trend was believed to have depressed wages in the low-skill segment of the labour market.

So the new government came to power late last year with a commitment to make targeted cuts in international students’ work rights – a measure expected to lead to lower enrolments in some programmes, and to reduce revenue for polytechnics and private tertiary institutions by about NZ$250 million (£130.9 million) a year.

Are those fears justified? In many countries, data on the destinations of international students post-graduation can be murky. But Statistics New Zealand has matched individuals’ border-crossing records to their tax and education records as part of its “integrated data infrastructure” (IDI): a dataset containing linked, anonymised data about individuals, which also includes social welfare, health and justice records.

New analysis published in December by the Ministry of Education uses these data to track international graduates in the 10 years post-graduation. It looks at questions such as what proportion and what sort of graduates remain in New Zealand after graduating, and for how long; what proportion enter the workforce; and how do their earnings compare with domestic graduates?

The report finds that in the first year after graduating, about a quarter of international students go overseas, about a third exercise their work rights and go into employment and about a quarter move on to further study in New Zealand. But after 10 years, nearly two-thirds are overseas and less than a quarter of international students are in employment. So, in reality, there hasn’t been a stampede from study to permanent residence.   

The rates vary less than might be expected by education level. After 10 years, 65 per cent of bachelor’s degree holders are overseas and 23 per cent are working in New Zealand, while 69 per cent of those with postgraduate qualifications are overseas and 22 per cent are in work. But 23 per cent of those who did only sub-degree programmes were also working in New Zealand: a group that would be less likely to have the high skills that the country needs and who are usually expected to be least likely to find a niche in the country’s employment market.

Median earnings for international graduates who work in New Zealand after they complete their studies are lower than those for domestic graduates in most fields of study and at all qualification levels except doctoral level. At bachelor’s level, the only exception is in health; international graduates in medicine and nursing earn more than domestic graduates.

In most fields, the disparity also grows over time. For instance, in business, the difference between the median earnings of domestic and international graduates is higher five years after graduation than after two years – and it is higher still after eight years. This squares with previous research by New Zealand’s Ministry of Education, which found that people whose first language is not English tend to earn less in the country than native English speakers, even controlling for the level of qualification and the level of skills.

The IDI is now used in all social policy fields, not just education. In tertiary education, since 2013, it has provided the basis for New Zealand’s version of the UK’s longitudinal educational outcomes (LEO) data, which assesses the earnings of graduates of different universities and degree courses, and it is used to evaluate policy interventions by tracking outcomes while controlling for a mass of social factors. It creates the opportunity for a quantum step forward in social policy analysis.

Roger Smyth recently retired as head of tertiary education policy at New Zealand’s Ministry of Education. He is now an independent consultant and adviser.