Taxes paid by international students, graduates rise to record level

Crowds at a graduation ceremony in front of the main building at the Univeristy of Tartu.
Crowds at a graduation ceremony in front of the main building at the Univeristy of Tartu. Source: University of Tartu/Facebook

Last year, international students and graduates in Estonia paid more in labor taxes than ever before - a total of €16 million, data from Statistics Estonia shows.

Kadri Rootalu, data scientist at Statistics Estonia and the author of the analysis, said the number of international students in Estonia decreased, but they still accounted for 11.6 percent 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 majority worked in information and communication and educational institutions.

"Compared to local students, international students were more likely to work in start-ups: 15 percent of working international students did so compared to 3 percent of working local students," explained Rootalu.

The analysis also looked at the amount 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 in income tax and €7.8 million 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 the academic year 2019/2020 and continued working in Estonia was €4.5 million. 

Eero Loonurm, head of the Study in Estonia program 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.

Statistics Estonia also published five facts about international students, which have been published below.

Facts:

1) The number of working international students was smaller than in previous years, but their earnings were greater.

2) Labor taxes paid for international students and graduates of the academic year 2019/2020 amounted to €16 million.

3) The number of international graduates who stayed working in Estonia is on the rise: there were approximately 500 international graduates of 2019/2020 in the labor market each month.

4) They are most likely to work in information and communication technologies (ICT); engineering, manufacturing and construction; and business, administration and law.

5) Compared to local students, international students are more vulnerable in the labor market: their contracts are less secure and their number of jobs worked is higher.

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Editor: Helen Wright

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