A new study warns that imposing a cap on the number of international students could cost the Dutch economy between €4 and €5 billion in lost gross domestic product annually. The research, conducted by SEO Economic Research, was commissioned by a consortium of five major universities in the Randstad region: Leiden University, Utrecht University, Erasmus University Rotterdam, the University of Amsterdam, and Vrije Universiteit Amsterdam. The findings highlight a significant negative economic impact that would ripple through regions, businesses, and society as a whole, challenging the assumptions behind the proposed restrictions.
The proposed cap was initiated by the outgoing government cabinet as a cost-saving measure. However, the economic analysis indicates that the long-term economic damage would vastly outweigh any short-term fiscal benefits. The study estimates the net annual savings for the national budget would be between €80 million and €132 million. This figure is calculated from savings on education funding and social provisions, offset by lost tax revenue from the international graduates who would have otherwise stayed to work. This relatively small saving stands in stark contrast to the projected annual GDP decline of €3.9 to €4.8 billion, suggesting the policy could be counter-productive to the nation’s economic health.
Disproportionate Impact on Economic Hub
The economic consequences of the student cap would be most severe in the Randstad region, the economic heart of the Netherlands that generates half of the country’s GDP. According to the study, this urban conurbation would absorb 82% of the total projected economic loss. The concentration of universities and international businesses in this area makes it particularly vulnerable to a reduced influx of international talent.
Hardest-Hit Sectors
The analysis provides a breakdown of the sectors that would be most affected by the talent drain. Business services are projected to suffer the largest share of the losses, accounting for 39% of the total decline. Financial institutions would follow, with a projected 20% hit. The public sector, including vital areas like healthcare and education, would also face significant consequences, bearing 10% of the economic damage. These sectors heavily rely on a steady stream of highly educated graduates to fill critical roles and drive innovation.
Exacerbating Labor Market Shortages
International students have become an integral part of the Dutch labor market, with a growing number remaining in the country after graduation to work. Their contributions are crucial in mitigating labor shortages in high-demand fields. The research underscores the value of these graduates, showing a clear trend of increasing retention rates. For the 2017–2018 cohort, 40% of international graduates remained in the Netherlands one year after finishing their studies; this figure rose to 57% for the 2022–2023 cohort.
After five years, a quarter of these graduates still reside in the country, and of those, 80% are in paid employment. By reducing the number of incoming students, the proposed cap would directly shrink this pool of skilled labor. This would intensify existing shortages in key areas like business services, finance, and public administration, ultimately undermining the country’s economic capacity and competitiveness. The universities argue that a national talent strategy is needed, recognizing international students as essential contributors.
Risks to Business Climate and Foreign Investment
The economic damage extends beyond immediate GDP figures and the labor market. The study warns that a cap on international students would strain the Dutch business climate, potentially deterring foreign investment and prompting companies to move elsewhere. Previous research cited in the report indicates that the availability of international talent is a key factor for multinational companies operating in the Netherlands.
A significant portion of these companies have already expressed concerns. According to the findings, 30% of businesses that employ a large number of foreign knowledge workers are considering relocating their growth plans or other operational activities abroad if they cannot attract sufficient talent. Such a development would lead to a long-term loss of jobs, investment, and innovation capacity, further compounding the economic fallout from the student cap. The policy could inadvertently signal that the Netherlands is closing its doors to international talent, harming its reputation as a competitive global business hub.
Policy Debate and University Response
The proposed restrictions are part of a broader legislative push known as the “Internationalisation in Balance” act. This initiative includes measures such as making Dutch the default language for most bachelor’s programs and placing caps on specific English-taught tracks. Lawmakers are debating these changes as a way to manage student numbers and the perceived dominance of English in higher education. However, the universities contend that a blanket approach would be detrimental.
In response, the universities have put forward their own proposals for self-regulation. These include selectively increasing the number of Dutch-taught courses and applying caps only where student intake puts the most pressure on resources, rather than implementing a sweeping national limit. Meanwhile, there are early signs that the political debate is already having an effect. New international bachelor’s enrollments saw a decline of approximately 5% in the 2024-2025 academic year, contributing to the slowest overall growth in years. This suggests that the uncertainty surrounding the policy is already making the Netherlands a less attractive destination for prospective students.
