ABSTRACT
The purpose of this study was to
investigate the impact of student immigration on the economy of the UK with
special emphasis on the benefits and consequences. Using international students
in Northumbria University, Newcastle as case studies the researcher interviewed respondents and carried out a qualitative analysis of the
benefits and consequences of immigration using thematic analysis. The results
of the study showed that the benefits of immigration outweigh its negative
impacts on the UK economy. The benefits of immigration for the national economy as
identified by this study include skilled service delivery, increased aggregate
demand and an increase in GDP. The slight increase in the price of housing was the
only negative effect associated with student immigration in the United Kingdom.
Following the above findings the study recommends that the age-old mass media
habit of presenting immigration as an unnecessary burden to host countries
should be discouraged by the government and other relevant authorities, and consideration
should be made for the creation of low-housing areas, especially, for foreign
students coming into the UK considering the observed difficulties of securing
good shelter following their arrival in their cities of study, and the just
allocation of welfare benefits with special consideration for immigrants in
light of their economic contribution to society should be given serious
attention in the formulation and implementation of welfare policies.
TABLE OF CONTENTS
Chapter One
1.0.
Introduction …………………………………………………………………………7
1.1.
Background to the study…………………………………………………………….7
1.2.
Contribution to knowledge……………………………………………………...….12
1.3.
Research aims/objectives…………………………………………………………...12
1.4.
Research questions……………………………………………………………….....13
1.5.
Thesis structure/outline……………………………………………………………..13
Chapter Two
2.0
Introduction….............................................................................................................15
2.1
Conceptual Review.....................................................................................................15
2.2
Theoretical Review………………………………………………………………….17
2.2.1.
Theories and Models of Migration….....................................................................17
2.3
Empirical Review …………………………………………………………………..20
2.3.1
Immigration and GDP…………………………………….…………………
.....20
2.3.2
Education and Immigration ………………………………………………
….....22
2.3.3
Immigration and Social Welfare………………………………………………......23
2.3.4
Immigration and Housing …………………………………………………….......25
2.4
Summary of Review……………………………………………………………...…27
Chapter Three
3.0
Introduction……………………………………………..…………………….…… 28
3.1
Philosophy of the Study ……………………………………………………………28
3.2
Research Approach ………………………………….……………………………. 29
3.3
Ethical Approval ……………………………………………………….………….29
3.4
Research Methods …………………………………………………………………29
3.5.1
Study Location …………………………………………………………………..29
3.5.2
Qualitative Methods …………………………………………….……………….30
3.5.3
Primary Data Collection ………………………………………………………....31
3.5.4
Procedure for Interview……….………………….………………………………31
3.5.5
Secondary Data…………………………………………………………………...31
3.6
Method of Data Analysis…..…………………………….…………………………32
Chapter Four
4.0
Introduction ………………………………………………………………………...33
4.1
Interview Completion Rate ………………………………………………………...35
4.2
Study Themes ……………………………………………………………………....37
4.3
Results ……………………………………………………………………………...38
4.4
Specific Findings …………………………………………………………………...46
4.5
Chapter Summary …………………………………………………………………..50
Chapter Five
5.0
Introduction……….………………………………………………………………...51
5.1
Summary ………….………………………………………………………………...51
5.2
Implication ……………………………………………………………………….....54
5.3
Study Limitations …………………………………………………………....……...55
5.4
Recommendation …………….……………………………………………………...55
5.5
Suggestion for Further Study ……………………………………………………......55
Bibliography
……………………………………………………………….…………....58
Tables/Charts/Diagrams
Table 1 Generating
Interview Questions ………………………………………………33
Table 2 Interview
Completion Rate ……………………………………………………35
Chart 1 Interview
Completion Rate ……………………………..……………………. 37
Fig 1 Study Themes …………………………………………..……………………….
38
CHAPTER ONE
1.0 Introduction
This thesis focuses on exploring the impact of
international student immigrants on the UK economy in terms of benefits and
consequences. This chapter focuses on the background and purpose
(aims and objectives) for the study, the structure/outline, the content of each
chapter, and an overview of the envisaged contribution of this study to
existing knowledge on the economic impact of student immigrants.
1.1 Background to the Study
Immigration,
defined as the practice of taking up permanent residency in foreign countries
(Parry, 2023), has become a major feature of the 21st century.
Arguably, in every country of the world, certain percentages of its populace
owe their origin by birth to countries other than the ones they currently live
in. According to the United Nations International Organization for Migration
(IOM, 2022), the number of international migrants across the globe in 2020 was
about 281
million, which accounts for 3.6 % of the world's population. Most of
these people, as pointed out by the United Nations, (2022), are not “willing
migrants”, but individuals forced, out of necessity, to move away from their
birth countries due to several factors including conflicts, natural disasters,
economic, career and educational advancement. The result of the above is that
the majority of the migrations are made towards more economically advanced
countries. A list of the top 10 countries playing host to non-native residents by
the United Nations (UN) in 2020 featured some of the most economically buoyant
countries in the world. According to this report, the United States lead the
way with 50.6million foreign born residents followed by Germany with
15.8million, Saudi Arabia with 13.5million, Russia with 11.6million, the United
Kingdom with 9.4million, United Arab Emirates with 8.7million, France with
8.5million, Canada with 8.0million, Australia with 7.7million, and Spain with
6.8million respectively (World Population Report, 2023).
In
January 2021, the European Commission reported that out of the 447.2 million
people living in the EU (European Union) countries, 23.7 million (5.3%) were
non-citizens and 37.5 million (8.4%) were foreign-born; Excluding those who
were born and migrated within the EU countries (European Commission, 2022).
Although the United Kingdom (UK) has isolated itself from the European Union,
it bears a remarkable semblance with the EU countries in terms of immigration
rate. Over the last 10 years, the rate of immigration in the UK, like most of
the other European countries, has been relatively steady with an average of
673,000 entries per year. However, in January 2022 the number of entries into
the United Kingdom was set at approximately 1.1 million persons with 560,000
people leaving the UK thus creating a net migration of 504,000 (Office for
National Statistics, 2022; Investing.com, 2022). A record in the region’s net
immigration.
Following
the steady rise in the rate of migration across the globe in the last 50 years, researchers, economists, and
political scientists have indicated serious interest in identifying the factors
responsible for immigration across the globe and its implication, especially
economic, for countries involved (both host and vacated countries). Several
factors have been identified such as the need for security in embattled regions
or countries i.e. Ukraine, the need to escape hardship in certain
poverty-striking regions, the formulation of attractive and accommodating
immigration policies, and more recently freedom to travel after the covid-19
induced lockdown as well as the resumption of students who have been studying
remotely in foreign universities (Clark, 2022). The consensus however is that
“the driving force behind the perpetuity of immigration in developed countries
is more economical than political” (Peri, 2016, p5). These efforts to explore
the influencing factors and resultant effects of immigration have also resulted
in the formulation of different theories and models for studying the national
implications of immigration. Two perspectives stand out as offshoots of these
theories and models, in the investigation of the impact of immigration on the
national economy. First, there is the perspective of its “impact on the host
country” and second its “impact on the vacated country” (Hainmuellar &
Hopkins, 2014, p227). This study however lends itself to the impact of
immigration on the host country’s economy.
According
to Tumen (2016, p459), the effects of immigration on the growth of a host
country’s economy are both direct and indirect. These direct effects are
generally immediate such as an increase in the labour force and growth in TFP
(total factor productivity) through a reduced ratio of dependence. As a
country’s workforce experiences ageing, the dependency ratio (percentage of the
population outside its workforce) increases. However, through immigration, the
country’s workforce can easily be replenished as more immigrants are admitted
into the labour market. The Office for National Statistics (2022) reported that
in 2021, the number of employees in the EU who were citizens of countries
outside the EU was 8.84 million all of whom were between 20 and 64 years of
age. This is easy to understand as most
immigrants are either in search of better education or job opportunities and
whether skilled or unskilled they are more likely to be contributors to the
country than dependents. Hainmuellar and Hopkins (2014, p248) assert that the
effects of immigration are primarily, labour market competition and fiscal
burden.
Boubtanea,
Dumont, and Rault (2016, p20) point out that OECD (Organization for Economic Cooperation and Development)
countries in recent years have experienced massive increases in international
migration, especially “labour migration”. The influx of immigrants into these
countries creates labour competition in host countries which may be healthy or
unhealthy from the native workers’ perspective. Labour market competition
created by immigrants is perceived as healthy by natives if the immigrants are
unskilled and only present substitutive options for the country’s workforce.
However, when immigrants come in with higher competencies than them, the native
workers tend to perceive the competition as unhealthy as it would mean that
employers of labour are presented with better alternatives to what they have to
offer and sometimes even at cheaper rates, depending on the economic conditions
of the mother-country of immigrants. This is what Peri (2016, p3) meant when he said that immigration has
consequences, and a win for one group of people may ultimately result in huge
losses for other groups.
In
addition to the replenishment of the country’s workforce, immigration also can
accelerate national development in terms of research, inventions and
technological innovation. Immigration is more likely to happen among educated
citizens of a country than uneducated ones and among skilled individuals than
unskilled groups. Peri, (2016, p27) observed that the fastest-growing group
among foreign-born populations in Europe and the United States are students.
This includes both those who take up permanent residence after their studies
and those who are likely to return to their home countries. This group of
individuals no doubt come into the country with a level of field-specific
competencies and skills as most of them arrive with a minimum of a university
degree or more. Also because modern-day migration policy is selective and
tailored towards skilled individuals, most countries are bound to experience
development in technology, invention and innovations arguably at the expense of
departed countries (Boubtanea, Dumont, & Rault, 2016, p19).
Certain
countries and regions of the world especially in America and Europe have
introduced, in recent times, immigration programs and policies to attract
skilled individuals from other countries, most of which are less buoyant
economically. Bretschgar (2001) cited in Tumen (2016, p458), posits that a host
country is better placed to raise market shares and avoid the cost of
developing certain field-specific competencies if they sustain policies that
attract and accommodate skilled immigration and even countries with
non-selective immigration policies have also been shown over the years to
experience high growth impact (Collantes et al, 2014, p608). The admission of
skilled immigrants into the country also comes with the promise of increased
job creation and substantial advancement in science and technology. Boubtanea,
Dumont and Rault (2016, p8) reported that immigration contributed to the
creation of about 40% of the net jobs in Europe, America and some Nordic
countries between 1997 and 2007.
While
the pandemic created a temporary halt to immigration, the effect of Covid-19
has triggered a massive increase in immigration. As noted by Dustmann,
Schönberg, & Stuhler (2016, p34) 21st-century migration is predicated on
high skill and education. However,
rising poverty rates in developing and under-developed countries worsened by
the pandemic have expanded the migration group beyond the educated and skilled
population to include individuals who just want a better place and are either
low-level skilled or unskilled (Spenkuch, 2014). This indiscriminate entry of
immigrants into the host country may be counterproductive for the national
economy as most of these individuals end up multiplying the dependency ratio of
that country.
Indiscriminate
immigration may be appreciated more in areas where depopulation has become a
concern, as was the case in rural Spain in 2008 (Collantes et al, 2014, p609),
and there may be a need to re-populate certain regions of a country. However,
in areas or countries where there is limited space for housing, its impact
might be negative. Creating overcrowding, increased cost of housing, and
competition for limited social amenities and resources (Kiester & Vasquez-
Merino, 2021, p83). Accetturo et al. (2014, p54) in their study of the effect
of immigration on house prices found
that immigration raises average house prices at the city level.
In
summary, the effect of immigration on the host country is not just positive but
there are also situations created by immigration that may not be very
beneficial for the host country and its citizens. It is in the realization of
the dual effect immigration has on the host country’s economy that this study
aims at exploring the impact of
international student immigrants on the UK economy taking cognizance of the
benefits and consequences.
1.2 Contribution to Knowledge
Research
on immigration in the last decade has grown in many different directions
concurrently. However, two of the most prominent areas of immigration research
are the political and economic sectors (Borjas, 2016, p965). These studies have
focused on the implication of immigration in government policy formulation and
national economic development. Specifically, the part of research that borders
on the economic implications of immigration has taken on two perspectives of
investigation namely; the host-country perspective and the vacated-country
perspective (Hainmuellar & Hopkins, 2014).
While
it is true that many studies have been carried out on the economic impact of
immigration on host countries in such areas as skilled immigration and
unskilled immigration, there are very few studies on how immigrants who entered
a country for the sole purpose of education (as students) influenced the economy
of the such host country. And even in the few instances where such research has
been carried out, none has (to the best of the researcher’s knowledge) been
carried out in the UK.
1.3 Research Aims/Objectives
In the realization of this
knowledge gap, this research seeks to explore the impact of international
student immigrants on the UK economy (using Newcastle as a case study), taking cognizance of the benefits and
consequences. The study
seeks, specifically, to attain the under-listed objectives;
- To
assess the impact of brain gain on the UK economy by new student
immigrants.
- To
explore the benefits of increased aggregate demand and real GDP on the
economic growth of the United Kingdom.
- To
explore the impact of international student immigrants on social issues
such as limited housing supply and increase in welfare benefits on the UK
economy.
1.4 Research Questions
The
study will focus on exploring these stated objectives by seeking unbiased and
scientifically generated answers to the following research questions;
1.
How does the
knowledge gained by new student immigrants impact the UK economy?
2.
What are the
benefits of increased aggregate demand and real GDP on the economic growth of
the United Kingdom?
3.
What is the
impact of international student immigrants on social issues such as limited
housing supply and an increase in welfare benefits on the UK economy?
In carrying out the above task, therefore, this
study is expected to identify the specific benefits, as well as the likely
consequences of, international student immigration for the UK economy. Thereby
availing critical information for policy development and economic practice.
1.5 Thesis Structure/Outline
The
summary of each chapter’s contents is presented as follows:
•
Chapter 1: Introduction. The chapter
provides a background study of the economic impact of immigration and
contextualizes the research work focusing attention on both the positive and
negative impacts of immigration on host countries. The chapter also presents an
outline of the project as well as the aim, objectives and contribution of this
research to knowledge.
•
Chapter 2: Literature Review. This
chapter explores the relevant literature and scholarly works around the concept
of immigration and its impact on the national economy. The chapter also
presents a critical analysis of the major theories as well as current academic
arguments regarding the economic impact of immigration.
•
Chapter 3: Methodology. Outlines
approach and design for the research, methods for data collation, and analysis
to generate results.
•
Chapter 4: Results and Discussion.
Presents and interprets data assembled from interviews and discussions with
respondents, and integrates findings of the study with the existing body of
knowledge.
Chapter
5: Summary and Conclusion. Summarizes
the work done in this research, and makes conclusive remarks on the findings
and their implication for policy development and economic practices.
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