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Internationalisation of education and its effect on economic growth and development

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  • Mamta B Chowdhury

Abstract

This study examines the effect of education export on economic growth and development, using Australia as a case study since it is one of the top destinations for international students. International education has played a vital role in Australia's economy over the last three decades, becoming the third‐largest export of Australia after iron ore and coal and earning AU$40.3 billion in 2019. The sector supports about 250,000 jobs and provides an important source of skilled migrants for Australia. This study employs the cointegration and error correction model and quarterly data from 1974 to 2019 to analyse the effect of internationalisation of education on the Australian economy. The results suggest a long‐run positive relationship and a short‐run dynamic effect of international education on the economic growth and employment of Australia. The findings of this study have far‐reaching implications for other education‐exporting countries. Policy recommendations suggest taking proactive, flexible and innovative approaches to attract international students, and diversifying the market can support growth of the sector and enhance the economy‐wide spillover effects. The study further proposes sound and timely policies to promote the internationalisation of education to augment not only economic growth but also long‐run development for both education‐exporting and education‐receiving countries.

Suggested Citation

  • Mamta B Chowdhury, 2022. "Internationalisation of education and its effect on economic growth and development," The World Economy, Wiley Blackwell, vol. 45(1), pages 200-219, January.
    • Handle: RePEc:bla:worlde:v:45:y:2022:i:1:p:200-219
    DOI: 10.1111/twec.13174
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    References listed on IDEAS

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    1. MacKinnon, James G & Haug, Alfred A & Michelis, Leo, 1999. "Numerical Distribution Functions of Likelihood Ratio Tests for Cointegration," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(5), pages 563-577, Sept.-Oct.
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Jan Bergerhoff & Lex Borghans & Philipp Seegers & Tom Veen, 2013. "International education and economic growth," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-13, December.
    4. Mamta B. Chowdhury, 2012. "Growth and dynamics of Australia's education exports," Applied Economics, Taylor & Francis Journals, vol. 44(7), pages 879-888, March.
    5. Agarwal, Vinod B & Winkler, Donald R, 1985. "Foreign Demand for United States Higher Education: A Study of Developing Countries in the Eastern Hemisphere," Economic Development and Cultural Change, University of Chicago Press, vol. 33(3), pages 623-644, April.
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    Cited by:

    1. Gökçe Tekin Turhan & Pınar Tokal & Gamze Sart, 2023. "The Role of Financial Sector Development and Educational Attainment in the Achievement of Economic Sustainability: Evidence from BRICS Economies," Sustainability, MDPI, vol. 15(6), pages 1-18, March.
    2. Funda H. Sezgin & Gökçe Tekin Turhan & Gamze Sart & Marina Danilina, 2023. "Impact of Financial Development and Remittances on Educational Attainment within the Context of Sustainable Development: A Panel Evidence from Emerging Markets," Sustainability, MDPI, vol. 15(16), pages 1-14, August.
    3. Muhamadu Awal Kindzeka Wirajing & Tii N. Nchofoung & Felix Mejame Etape, 2023. "Revisiting the human capital–economic growth nexus in Africa," SN Business & Economics, Springer, vol. 3(7), pages 1-29, July.

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