During this academic year, colleges and universities across America experienced a 17% decline in the number of newly enrolled international students. Excluding the pandemic year, this marks the most significant decline observed in more than ten years. This downturn is having repercussions that extend well past the boundaries of higher education institutions. My recent examination suggests this translates to an almost $1 billion reduction in the U.S. GDP, a blow that disproportionately affects the small businesses and local economies that are vital to numerous communities.
TL;DR
- A 17% decline in new international students caused a $1 billion reduction in U.S. GDP.
- Food service, retail, and property leasing businesses face significant losses from fewer international students.
- 7,300 fewer employment opportunities and $500 million less in labor earnings resulted from this decline.
- National policy shifts impacting international student visas and enrollment risk the broader U.S. economy.
Businesses experiencing the most significant losses include those in the food service sector (700 positions), the retail trade (350 positions), and property leasing for both homes and businesses (345 positions), along with automotive maintenance services (100 positions). This scenario illustrates the intersection of input-output modeling with the practice of economic consequence assessment. While the precise companies affected remain uncertain, my observations at universities nationwide suggest these are precisely the kinds of local establishments found in college communities that cater to a diverse student population.
My assessment measured the financial effects of new international students' expenditures beyond tuition fees. The outcome: a reduction of 21,587 new international students (277,118 this year compared to 298,705 last year) translates to 7,300 fewer employment opportunities and $500 million less in earnings from labor.
Additional examination shows which professions face the greatest consequences. Out of the 7,300 positions that are impacted, 390 are for retail sales personnel, 370 are for food and drink attendants, 290 are for home health assistants, 280 are for health diagnostics roles, and 260 are for material handling staff. This figure solely considers expenditures unrelated to tuition. The repercussions of diminished income will also affect post-secondary educational establishments.
What are the underlying causes for the extensive economic impact of newly arrived international scholars? Collectively, these students function as substantial consumers, disbursing considerable amounts on accommodations, sustenance, travel, medical services, and merchandise. The financial contributions from international students circulate within regional economies. For instance, a property owner might utilize the rent received from a student to purchase pizza, and the proprietor of the pizza establishment then uses the funds the landlord expended on a meal to acquire a fresh consignment of pizza containers – and this process continues.
The aggregate spending of this year's 277,118 new international scholars contributes to 93,000 employment positions and $12.6 billion in gross domestic product. Prospective international scholars who encountered difficulties with their visa applications or were impacted by President Donald Trump's stricter immigration policies will direct their expenditures to different locations, be it their native nations or alternative international educational hubs.
The economic downturn affecting regional economies and jobs in the service sector might appear subdued presently, but as the academic term progresses and the lack of expenditure spreads through local markets, the outlook is bleak for local consumer outlays, earnings of small enterprises, business properties near educational institutions, and even government revenue. Municipalities and urban centers with substantial university presences will experience the most pronounced impacts, particularly in states with a significant history of international student populations, such as California, Texas, New York, Florida, and Illinois.
Executives and public servants ought to consider the extensive consequences stemming from shifts in international student figures within higher learning institutions. The wider connections to the economy, both at the local and national levels, are not sufficiently recognized. It goes without saying that a reduction in international students now could translate to a deficit of qualified professionals in fields such as technology, medicine, and engineering in the future. Equally significant, and perhaps less obvious, is the direct danger to employment and gross domestic product in industries supporting enrollment, which arises from a decrease in incoming international students.
New regulations that impede students' ability to obtain visas, coupled with suggested limits on international student enrollment at certain universities, pose a risk to the broader U.S. Economy and to local enterprises within our neighborhoods, extending beyond just academic establishments. The economic consequences of national policy shifts at the community level cannot be overlooked. Beyond beyond the immediate financial effects, my tenure as an educator at institutions of varying sizes has led me to believe that international students enhance their surroundings in ways that go beyond their spending at neighborhood shops. The viewpoints they contribute, both on an individual and academic plane, are priceless. They've prompted my contemplation on subjects ranging from economics and progress to matters both personal and deeply significant. Their presence makes us more prosperous.
International scholars contribute to educational expenditures within localities nationwide, and the influx of new international students also restricts opportunities for Americans to advance their careers and prosper. It's crucial that we acknowledge and don't downplay the extent to which this surge in demand creates a significant obstacle for economic expansion in vital areas.
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