International students and graduates continue to contribute more in taxes

According to Statistics Estonia, in the academic year 2020/2021, international students and graduates in Estonia paid more than ever before in labour taxes: a total of 16 million euros. At the same time, the number of international students was smaller, while the number of international graduates continued to rise. International students and graduates were most likely to work in information and communication as well as in education. Compared to local students, they worked more often in start-up enterprises.

According to Kadri Rootalu, data scientist at Statistics Estonia and the author of the analysis, the number of international students in Estonia decreased, but they still accounted for 11.6% of the total number of students. Due to pandemic-related restrictions, there was a considerable decline in the number of international students working in accommodation and food service activities. The most worked in information and communication and educational institutions. "Compared to local students, international students were more likely to work in start-ups: 15% of working international students did so compared to 3% of working local students," explained Rootalu.

International degree students by number

International degree students by level of study 2021/2022

The analysis also looked at how much international students contributed to the Estonian economy in taxes paid on their work income. In the academic year 2020/2021, they paid 3.6 million euros in income tax and 7.8 million euros in social tax, which is an increase of more than a million euros year on year. The total tax receipts from international students who graduated in academic year 2019/2020 and continued working in Estonia was 4.5 million euros.

Eero Loonurm, head of the Study in Estonia programme at the Education and Youth Authority foresees an even greater role of international graduates in the future. "The most likely to benefit from the economic impact of international students and graduates are international businesses in Tallinn and to a lesser extent in Tartu where the working language is English. The analysis also reveals that it would be important to develop measures to help international students acquire internships in the public sector. In the developed world, international students are considered a part of the talent policies of central and local government institutions. We should seek solutions to make sure that the benefit provided by international students would extend across the whole country," said Loonurm.

Facts:

The number of working international students was smaller than in previous years, but their earnings were greater.
Labour taxes paid for international students and graduates of academic year 2019/2020 amounted to 16 million euros.
The number of international graduates who stayed working in Estonia was on the rise: there were approximately 500 international graduates of 2019/2020 in the labour market each month.
The most likely to work besides studying are international students in information and communication technologies (ICT); engineering, manufacturing and construction; and business, administration and law.
Compared to local students, international students are more vulnerable in the labour market: their contracts are less secure and their number of jobs worked is higher.

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International students and graduates continue to contribute more in taxes

Facts:

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