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The growth of international students and economic development: friends or foes?

In recent years there has been a significant growth in the number of international students. In several developed countries the inflow of foreign tertiary students has become a significant source of income for higher education (HE) providers and the economy as a whole. This net inflow of foreign students has been indirectly and, more recently, directly encouraged by government policies in these countries. However, this ‘trade’ in HE is unbalanced, with low‐income countries being significant net ‘importers’ of HE. Here we review the theoretical and empirical literature to reassess the impact of this growth of international students on the extent and pattern of global income inequality. We conclude that the benefits from the growth of trade in HE accrue predominantly to developed countries, with the costs being disproportionately borne by the poorest countries. Analysis is presented explaining why national and pan‐national policies are unlikely to rectify this imbalance.