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Studying Abroad: Catalyst for Economic Growth or Cause of Brain Drain?

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Picture this: You wake up in a country where students are incessantly flocking to foreign universities leaving their homelands behind. Well, no more is this a painted hypothesis, but has translated into a starking and unsettling reality. According to data revealed by the Ministry of External Affairs, over 13.35 lakh students are currently pursuing higher education in foreign universities.

Some theories interpret this trend as herd mentality, with students following a common path, while others attribute it to flaws in the Indian education system. Surprisingly, multiple factors are at play, including limited opportunities, caste-based reservations, and the underwhelming global performance of Indian institutions. For some students, studying abroad is a way to boost their credentials, while for others, it’s simply the only viable option.

Studying abroad can be seen as both a brain drain and a national benefit. On one hand, students gain advanced skills, global exposure, and international networks, which they can leverage to uplift local industries if they return. On the other, many remain abroad due to better opportunities, leading to a talent drain. A recent study titled International student mobility and poverty reduction: A cross-national analysis of low- and middle-income countries published in the International Journal of Educational Research puts a spotlight on the positive side of students moving abroad and how they can be assets to the nation. Let’s take a deeper look at the pros and cons of choosing foreign universities as favourite study destinations.

Key findings of the studyPublished in The International Journal of Educational Research, the study focuses on how these students, upon returning home, contribute to poverty alleviation over a span of about 15 years.


The researchers analyzed data from 43 countries between 1999 and 2018, revealing a notable correlation between increased outbound student mobility and decreased poverty levels in these nations. The findings indicate that the impact of returnees unfolds gradually, as their newly acquired skills, global perspectives, and transnational connections stimulate local economic and social development. Take a look at these factors in detail.

Transformative Impact of International Education on Long-Term Poverty Reduction

The study indicates that the gradual return of international students from low- and middle-income countries has a significant long-term effect on reducing poverty levels. Analyzing data from 1999 to 2018, the authors reveal a clear correlation: as the number of students studying abroad increased, poverty levels in these countries consistently declined over the 15-year period. This finding underscores the transformative potential of global educational opportunities on societal well-being.

Long-Term Impact of International Study on Poverty Alleviation

The findings show that global study mobility significantly contributes to poverty reduction in low- and middle-income countries over time. Between 1999 and 2018, researchers found that international student returnees gradually enhanced economic and social development in their home countries.

As the number of students studying abroad increases, corresponding poverty levels decline, indicating that the skills and perspectives gained during their studies are crucial for local progress. The notable changes in poverty levels highlight the long-term benefits of international education, reinforcing the need to support study-abroad opportunities as a strategy for sustainable development and poverty alleviation.

Impact of Transnational Spaces on Development

The concept of "transnational spaces" highlights the broader benefits students gain from studying abroad, extending beyond academics. By immersing themselves in diverse cultures, students form valuable networks with peers who share aspirations for progress.

Upon returning home, they leverage their skills and global insights to drive economic and social development. Their international connections facilitate the exchange of knowledge and innovation, enabling cooperation and attracting investments for poverty alleviation initiatives. This underscores the transformative potential of international education in fostering sustainable development within their communities.

Addressing Inequities in International Education: Opportunities and Challenges

The authors highlight that the majority of international students originate from more affluent families, given the high costs associated with studying abroad. This situation underscores the importance of providing scholarships from governments and institutions to support students from lower-income backgrounds. They assert that experiencing diverse cultures abroad can profoundly change how students perceive and interact with their home countries, emphasizing that these opportunities should be available to all, regardless of financial status.

However, the authors also note a significant issue: many international students do not return home after completing their studies. Instead, they often see studying abroad as a stepping stone to permanent emigration, which can lead to brain drain in their native countries.

Why are Indian students choosing international institutes?Recently, Jagdeep Dhankhar, Vice President of India metaphorically compared Indian students leaving abroad for education as a “disease” requesting parents to gauge its potential downsides for their children’s future and India’s economic health. Speaking at an educational event in Sikar, Rajasthan, Dhankhar voiced concerns that the increasing commercialization of education is diminishing its quality, posing risks to India's long-term development.

However, despite the presence of prestigious Indian Universities like the Indian Institutes of Technology (IIT) and Indian Institute of Management (IIM) why are students motivated to leave their motherland for education? Let’s dig in further to uncover the reasons.

Numerous factors such as lack of adequate opportunities and skill utilisation play a role in compelling Indian students to navigate to foreign lands to pursue higher education.

  • Higher Quality Education and Research Opportunities: Fascination for foreign universities usually stems from their high academic reputation and employability factors. They enable students to get access to state-of-the-art facilities and exposure to innovative learning environments making foreign study destinations more appealing.
  • Employment Prospects and Higher Salaries: Academic institutions nestled in the United States, and the United Kingdom are well-acclaimed for imparting high-quality education, hence cementing their standing as supreme universities. Graduates often find that international job markets offer higher pay, career advancement opportunities, and a stable economic environment.
  • Skill Utilization and Career Advancement: Many Indian professionals feel that their skills are better utilized and recognized abroad. Developed countries may offer specialized roles, cutting-edge projects, and pathways for quicker career advancement, which are not always available in India.
  • Better Quality of Life: The quality of life abroad, including access to healthcare, infrastructure, and work-life balance, often outweighs the conditions available in India. For many, the social and environmental factors play a significant role in choosing to live and work overseas.
  • Political and Social Factors: Factors such as political stability, social inclusivity, and progressive work environments also influence the decision to emigrate. For some, the desire to live in a more inclusive and globally connected society is a significant motivator.

  • Research and Innovation Funding: Limited funding for research and innovation in India can be a deterrent for those in scientific and technological fields. Countries with substantial funding for R&D provide greater opportunities for professionals in these areas to excel and make impactful contributions.

How can students moving abroad become a source of economic growth for India?
As more students from India and other developing countries pursue education abroad, the economic implications of this movement are substantial. Although concerns around brain drain often dominate the discourse, students studying overseas can, in fact, bring notable economic benefits to their home countries. These advantages range from financial remittances and knowledge transfer to increased trade relations, all of which can strengthen economic growth and resilience.

Increased Remittances

One of the most immediate economic benefits of students moving abroad is the inflow of remittances. Many students who study overseas eventually secure jobs in high-income countries and send money back home to support their families. Remittances help maintain foreign exchange reserves and boost domestic spending, particularly in sectors like housing, healthcare, and education. This inflow of funds not only supports households but also circulates through the local economy, stimulating business growth and infrastructure development.


Knowledge and Skill Enhancement

Studying abroad exposes students to advanced research, modern technologies, and innovative educational methods that they can later apply within their home countries. For example, students in fields like artificial intelligence, biotechnology, or clean energy gain valuable expertise in cutting-edge areas that are essential for economic advancement. Upon returning home or through remote work, they can apply their newly acquired skills in local industries, which can enhance productivity, boost innovation, and improve the quality of goods and services. This knowledge transfer can elevate industries to global standards, making them more competitive in international markets.


Expansion of Trade and Investment Opportunities

When students study abroad, they form professional networks with peers, professors, and industry leaders from around the world. These relationships can foster trade and investment opportunities between their home countries and foreign markets. For instance, a student who builds connections in the United States or Europe might later serve as a bridge for Indian businesses looking to expand or partner with companies in these regions. Such connections can open doors for foreign investments in domestic industries, drive exports, and increase India’s footprint in global markets. As these students transition into professional roles, they bring home market insights that can help Indian businesses succeed internationally.


Entrepreneurship and Job Creation

Students who have studied abroad often bring back entrepreneurial ideas inspired by different business cultures and ecosystems. They may establish new companies that introduce innovative products and services to the Indian market, which can create jobs and contribute to economic diversification. Startups founded by returnees can also attract investment from foreign sources, injecting capital into the local economy and strengthening sectors like technology, healthcare, and renewable energy. By fostering a culture of entrepreneurship, these returnees can help India transition towards a more innovation-driven economy.
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