Monday 2 June 2008

The home countries of UK foreign students

I've been looking at the home countries of the UK's foreign students. There is some data from 2001 and earlier at http://www.hesa.ac.uk/index.php?option=com_content&task=view&id=801&Itemid=250.

Some of the 2000-1 figures are perhaps surprising. Greece for example sent most students to the UK by a long way (31,000), followed by Ireland (14,000) and China (12,000).

All of the top twenty countries are either developed or rapidly growing developing states. The first African country is Nigeria (3,000) in 21st position. Possibly countries get rich then send students to the UK with their new wealth, but there is also the reverse causality, whereby countries which are outward looking and send students abroad benefit from the added knowledge they have. The first causality direction does not exclude the second, which raises the possibility that the feedback gives rise to endogenous growth.

Granger causality tests examine which of two time series tend to lead the other, so this question looks like it should be answerable. However, the data availability of country of origin is limited (back to the mid 1990s, and the recent data is charged) so one would have to assume that the observed cross-sectional data reveals a persistent characteristic of national outward-lookingness, or make some other assumption capable of moving from cross-section to time series, or just use a cross-sectional regression.

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