Restricting international students causes hefty damage to economy
The government’s restrictions on international students will deal a significant blow to the Dutch economy, The total value of the economy will decline by more than €4 billion, according to calculations by UvA’s research institute SEO.
The ambitious plans outlined in the Wet Internationalisering in Balans (WIB) will have catastrophic consequences for Dutch prosperity. The current government’s tightening of the act will lead to a decline of 4 to 5 billion in the total economic value of the Netherlands. SEO Economic Research (SEO), affiliated with the UvA, came to this conclusion after conducting a study.
At the request of five Dutch universities, including the University of Amsterdam, the SEO research institute calculated the consequences of reducing the number of international students. The institute calculated what the decline in student numbers would mean for the economy in the long term.
No workforce
According to the study, the restriction on international students in particular has negative consequences for prosperity. In the Netherlands, there is high demand for highly educated people in healthcare, education and government. The financial sector and business services are also in need of employees who cannot be recruited from within the Netherlands alone. Currently, 15 per cent of highly educated employees in the Netherlands are foreign nationals.
Because fewer students are coming to the Netherlands, and consequently fewer students are staying on for a job, various sectors are experiencing severe shortages and economic damage. The lack of international workers is expected to lead to major problems in the coming years. The SEO estimates that in the Randstad alone, the value of the economy will fall by 3.9 billion euros in the coming years. Tax revenues for the government will also decrease without workers: the state will lose more than 600 million euros in income tax and VAT.
Business climate
The business climate has also been significantly damaged by the restrictions on international students. One in three companies with foreign employees is considering relocating its activities now that it is less able to attract international talent. The business climate in the Netherlands is deteriorating anyway: due to the current regulatory burden, 20 per cent of entrepreneurs are seriously considering closing down. Large multinationals such as Shell and Unilever have already left the country in the past five years.
The government previously pointed out that the decline in international students generates money too. For example, fewer social services, such as healthcare and housing, would need to be arranged for students. The reduction would also save on education costs for incoming international students. SEO calculated these savings at a maximum of 132 million euros in the coming years. However, according to the research institute, this pales in comparison to the total loss to the economy of more than 4 billion euros.
