Swedish HEIs as a tool to attract highly skilled labor from foreign countries

This report examines how, and the extent to which Swedish higher education institutions (HEIs) contribute to attracting highly qualified persons to the Swedish labour market. More specifically, it analyses the extent to which incoming international students and doctoral candidates stay in Sweden on completion of their studies, and what measures could be taken to achieve a higher retention rate. The results show that around 20 per cent of the incoming students and doctoral candidates stay and work in the country on completion of their studies. The retention rate tends to be somewhat lower than in other comparable OECD countries.

Beneficial for the Swedish economy

Thousands of students from other countries choose to come to Sweden to study every year, and they contribute to Sweden’s economy during their period of study by paying tuition fees and through their consumption in the country. There are numerous indications that if they stay and work in Sweden, they can contribute to growth and have a positive impact on the economy. The need for incoming students and doctoral candidates to stay in Sweden is also likely to increase as Sweden moves towards a shortage of engineers and IT specialists. International students and doctoral candidates are a potentially important group for addressing these skills shortages, as a large proportion of them study STEM programmes¹.

Increased global competition for talent

In English speaking countries such as the US, the UK and Australia, higher education has long been a significant export industry, and these countries receive the majority of the world’s international students. It was only with the introduction of tuition fees for third country students in 2011 that Sweden started to compete with these countries for paying students. The numbers of third country students entering Sweden fell substantially during the first two years after tuition fees were introduced; however, they have subsequently recovered relatively well.² Even so, countries such as Denmark and the Netherlands have had a much better development than Sweden over the last decade, seen to the number of incoming freemover students.³ At the same time, competition is also increasing from countries such as China and India, which have expanded their own education systems.

Comparatively few international students stay

Of the students who completed their studies in 2013, 20 per cent had employment in Sweden in 2015. Even though comparisons with other countries should be made with a certain amount of caution, the proportion of incoming students that stays in Sweden tends to be somewhat lower than the corresponding proportion in comparable OECD countries. For incoming doctoral candidates, 40 per cent of those who completed their studies in 2013 had employment in Sweden in 2015. A small number of HEIs accounted for the majority of the incoming students and doctoral candidates who stayed in Sweden. A large proportion of the students and doctoral candidates who stayed ended up in the metropolitan areas and primarily in Stockholm.

Many of those who stay work in private companies

Of the incoming students who completed their studies in 2013, 84 per cent had employment in private companies in 2015. Of these, 45 per cent worked in large companies, 36 per cent in small and medium-sized companies and 19 per cent in micro-enterprises. Of the incoming doctoral candidates who completed their studies in 2013, 34 per cent had em­ployment in private companies in 2015. Of the incoming students who remain in Sweden 21 per cent works in ”Professional, scientific and technical activities”, 15 per cent in ”Information and communications”, and 14 per cent in ”Manufacturing”.

Changed pattern with the introduction of tuition fees

The introduction of tuition fees in 2011 drastically reduced the number of students from third countries coming to study in Sweden. This report shows that this downturn also contributed to a fall in the number of incoming students who remained in Sweden after their studies by almost 60 per cent. The decrease was especially significant for students from Asia. At the same time, the results indicate that the proportion of students who remained is about the same as before fees were introduced, while the proportion of incoming students who stay on and work in private companies has increased. The proportion of incoming students who stay after completing their studies has fallen at several HEIs after the intro­duction of tuition fees. However, there are also examples of HEIs where the proportion that remains has increased. In interviews with employees at a number of HEIs, it emerged that the introduction of tuition fees had led the institutions to act in different ways in relation to recruitment of students from third countries.

The government can improve the conditions to attract and retain

In certain respects, other countries have regulations that are formulated more favourably to enable and encourage international students to stay and work in the country. In Sweden, third-country students are permitted to stay for six months after graduating in order to look for work. In some other countries, this period is 12 or 18 months. Additionally, certain comparable countries have more favourable laws for international students who want to start a company in the country after graduating. One example is Denmark’s “establishment card”. It also appears that Swedish HEIs have experienced problems with the Migration Agency’s turnaround times and with the Agency’s communication with students and HEIs. Several of the interviewees also state that it is difficult for many incoming students and doctoral candidates to find adequate accommodation.

The government should consider implementing a one-off initiative to encourage more HEIs to develop a strategy to attract and retain students from third countries. For smaller HEIs such an initiative should entail profiling themselves in relation to future global challenges and trends, like for instance digitalisation. Sweden, unlike many comparable countries, lacks scholarship programmes targeted at particularly gifted students. Sweden could benefit from having a broader range of less generous scholarships and at the same time a small number of more comprehensive scholarships for particularly gifted students. In addition, future scholarships could probably, to a greater extent, be designed in conjunction with companies. Certain countries also use other economic incentives targeted both at HEIs and directly at international students to encourage more to stay after completing their studies. One example is the Dutch expert tax, which has specific conditions for young international students and doctoral candidates.

The HEIs can improve links to the labour market for incoming students

All the HEIs interviewed felt that it was important to attract international students, but only a small number considered it to be a priority goal for the institution that international students stayed and worked in Sweden. Examples of areas where the HEIs felt that they would be able to work more strategically are cooperation agreements with HEIs in other countries, links with businesses and the labour market, as well as career guidance for international students, language instruction in both English and Swedish, and follow-up of international students’ careers.

Need for further studies based on Swedish data

In comparison with Denmark and the Netherlands, for example, little research has been conducted in Sweden on attracting international students and their establishment in the Swedish labour market. Replicating studies performed in the above-mentioned countries would be a first step in increasing knowledge. In particular it would be interesting to know more about the economic effects of retaining incoming students in Sweden. These types of studies could be used to further explain how effective HEIs are, in relation to other alternatives, when it comes to attracting highly qualified persons to the Swedish labour market. A central element in increasing knowledge about factors affecting Sweden’s attractiveness for international skilled workers is access to good data. In this context there is a need to integrate data from several different government agencies.

Sweden can be better at attracting and retaining international students

This report shows that overall Sweden is performing less well than several comparable countries when it comes to attracting and retaining international students, at the same time as global competition for these talents is hardening. Of the students who currently stay in Sweden after completing their studies, a large proportion works in private companies. There is a potential in developing cooperation between the HEIs and private companies regarding international students’ links to the labour market. In summary, there are a number measures that the government could implement to further realise HEIs’ potential to attract and retain international students.

¹STEM stands for Science, Technology, Engineering and Mathematics

²Before fees were introduced, 14,500 freemover students arrived; the year after they were introduced, the numbers fell to barely 5,800, to then rise to 9,800 in the 16/17 academic year.

³Freemover students are not studying within an exchange program but have arranged their studies abroad on their own.

Swedish HEIs as a tool to attract highly skilled labor from foreign countries

Serial number: PM 2018:11

Reference number: 2017/054

Download the report in Swedish



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