International Student Movements and the Effects of Barriers to Trade in Higher Education Services

Abstract

As with many others activities, higher education is undergoing rapid globalisation. It is increasingly also the subject of trade negotiations, both under the General Agreement on Trade in Services (GATS), and in various preferential trade agreements. Yet little is known empirically about what drives trade in higher education services, and even less is known empirically about the role of barriers to that trade. This paper offers contributions on both fronts. It develops and tests a model of international student movements, recognising that higher education in many countries is price-controlled and entry is typically subject to non-price rationing. It investigates the role of trade barriers, and finds significant effects for barriers in both the sending and receiving countries, which in turn are distorting the methods of service delivery. It explores the policy implications, finding that barriers in the receiving country appear not to be covered by the GATS. In addition, the GATS framework appears relatively poorly placed to deal with barriers to the growing trade in higher education delivered via the mobility of programs, providers or projects, rather than students. The paper also explores areas for further research.