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The Impact of International Students on the U.S. Economy

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The Economic Impact of International Students on the U.S. Economy

The Economic Impact of America’s International Students

For decades, the U.S. has been the top destination for students looking to study abroad.

It’s easy to see why. Not only does the country provide access to world-class economic hubs like Silicon Valley, but the U.S. is also home to 14 of the top 20 universities in the world, many of which are famed for their research and alumni networks.

Yet, there is cause for concern.

International enrollments in the U.S. have slowed, while other countries are attracting a larger share of the global talent pool. To help us understand what’s at stake if enrollments continue to decline, today’s infographic shows the impact of international students on the U.S. economy.

Driving American Innovation and Growth

International students and scholars are a vital economic asset, and America’s ability to attract them puts the country in an enviable position.

First, there are the direct economic benefits which result from tuition fees and living expenses. Throughout the 2018/2019 school year, these benefits totaled $41 billion, a comparable value to many other American exports:

ExportValue (2018)
Automobiles$158B
Commercial Aircraft$131B
Pharmaceuticals$51B
Education Exports$41B
Telecommunications Equipment$36B
Soybeans$17B

Source: NAFSA, Evans, WorldCity

Even after graduation, however, international students and scholars continue to make significant contributions to the U.S. economy.

For example, attracting the world’s brightest minds helps to grow the knowledge economy in the United States, and 40% of American Nobel Prizes won in chemistry, medicine, and physics since 2000 have been awarded to immigrants. Furthermore, students who return home often do so with a network of connections and an appreciation for American culture, thus promoting U.S. international leadership.

Finally, these individuals can also go on to become successful entrepreneurs and business leaders in the U.S. economy. The list is long, but here are two noteworthy examples:

  • Elon Musk, known for founding Paypal, Tesla, and SpaceX, was born in South Africa. He received two Bachelor’s degrees from the University of Pennsylvania before founding his first business.
  • Satya Nadella, CEO of Microsoft, was an international student from India. He received an M.S. from the University of Wisconsin and an MBA from the University of Chicago before helping Microsoft develop its cloud computing capabilities.

Cause for Concern

In recent years, however, the number of new international students enrolling at U.S. institutions has been on the decline:

School YearNew International Student Enrollments in the U.S.Percent Change 
2013/14270,128--
2014/15293,7668.8%
2015/16300,7432.4%
2016/17290,836-3.3%
2017/18271,738-6.6%
2018/19269,383-0.9%

Source: Institute of International Education

With so many opportunities and success stories, why have international enrollments slowed? A survey of 509 higher education institutions in the U.S. revealed the top reasons for declining international enrollments:

Cited Reason for Decline in Enrollment% of Institutions
(Fall 2016)
% of Institutions
(Fall 2017)
% of Institutions
(Fall 2018)
Visa Application Process (delays/denials)34%68%83%
Social and Political Environment15%57%60%
Enroll in Another Country’s Institutions19%54%59%
Cost of Tuition51%55%57%
Feeling Unwelcome-49%50%
Securing a Job41%44%
Physical Safety12%33%44%

Source: NAFSA

Critically, the two most common reasons for declining enrollment—visa applications and the social and political environment—suggest that the quality of an American education is not the issue. Rather, it would appear that students are being discouraged from coming to the United States.

When we discourage or turn away international students, we lose much more than the students themselves… We lose their inventions and innovation, their collaborative input and their contributions to our communities.

– Dr. Martha E. Pollack, President, Cornell University

At the same time, other countries are taking proactive measures to attract global talent.

Australia

Australia allows its international students to work for up to 18 months after graduation. This limit can increase to 4 years for graduates of high-demand occupations. In 2018, the country saw a 15% increase in international enrollments.

Canada

Canada, a country distinguished for its multiculturalism, is quickly becoming an attractive destination for international students. The country offers expedited visa processing for qualified individuals, as well as a 3-year work visa for graduates. In 2017, international enrollments in Canada grew by an impressive 20%.

Potential Consequences

The world’s brightest minds are an important asset for continued innovation and growth, and today, there is a mass of countries welcoming them with open arms.

While the U.S. is still the preferred destination for international students and scholars, the country’s leadership in this space is at risk. In fact, since 2001, the share of international students in America has fallen from 28% to 21%.

Will the U.S be able to maintain global competitiveness if the number of new international students enrolling continues to fall? Can the country work to cultivate a more welcoming and barrier-free route to higher education?

These are potent questions that will need to be answered, especially with a sizable economic impact on the line.

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Cities

Visualizing the Footprint of Highways in American Cities

Highways improved mobility for the average American, ingraining the automobile into the urban fabric of American cities, for better and worse.

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The Impact of Highways

Footprint of Highways in American Cities

Visualizing the Footprint of Highways in American Cities

Driving on the open road is a defining feature of the American experience, made possible by coast-to-coast highways. It defined a generation of life and ingrained the automobile into the urban fabric of American cities, for better and worse.

Today’s animations show how highways reshaped the downtown cores of six American cities and created new patterns of urban life. But first, some background information on the creation of the interstate system.

The Interstate Highway System

The U.S. Interstate System was created on June 29, 1956, when Dwight Eisenhower signed the Federal-Aid Highway Act. It would eventually run 46,876 miles, cost $521 billion and take 36 years to complete.

Map of the US Interstate System

From San Diego to Bangor, the interstate highway system connected Americans and opened up the country to commerce and geographic mobility like never before, but for all its benefits, this new transportation network ripped through established patterns of urban and town life, creating a new era of urban development.

The Legacy of Highways: The Suburbs and Inner Cities

The vast geography of continental America helped to entrench personal mobility and freedom into American society. Highways and automobiles accelerated this lifestyle and even changed the shape of entire cities.

According to Prof. Nathaniel Baum-Snow of the University of Toronto, between 1950 and 1990, the population of central cities in the U.S. declined by 17% despite a population growth of 72% in larger metropolitan areas during the same period. Baum-Snow posits that, had the interstate highway system not been built, central cities’ populations would have increased 8%.

Firms followed the workers to the suburbs, but the highways system also created additional benefits for these firms. Cross-country road access freed manufacturing from ports and downtown rail hubs, while allowing economies to operate across larger distances, altering the dynamics of typical urban economies.

Faced with this new reality, inner cities struggled in years to come.

Inner Cities

The introduction of highways created an increase in the supply of land for development through faster commutes to outlying areas. In 1950, half of all jobs were located in central cities. By 1990, less than one-third of urban jobs were located in the core of American cities.

“Not TV or illegal drugs but the automobile has been the chief destroyer of American communities.” Jane Jacobs, Author The Death and Life of Great American Cities

Benefits of new development accrued to the outer areas while the construction of the highways in inner cities displaced largely low-income communities, segregated neighborhoods, increased the amount of air and noise pollution, devalued surrounding properties, and removed access to jobs for those without a car, further concentrating poverty.

Before and After: Six American Cities

A bird’s eye view of six American cities reveals what was and what is now. By overlaying existing highways over the neighborhoods they replaced, it becomes clear how much interstate construction drastically altered America’s urban landscape.

Oakland
Public opposition to the construction of I-980 was so strong that developers abandoned the project in 1971, only to complete it over a decade later.

Miami Highway
The I-95 carved through Miami’s largely black Overtown neighborhood. The construction of a single highway cloverleaf resulted in 20 square blocks being demolished, displacing over 10,000 people in that community.

Providence Highway
The I-95 comprised unconnected segments between 1957 and 1965 through the densest urban areas in a deliberate effort to prevent premature suburbanization and to revitalize the downtown core.

Cincinnati Highway
The I-71 cuts downtown Cincinnati off from its waterfront and a massive freeway interchange forced the destruction of dozens of blocks west of downtown.

Detroit highway construction
Freeway construction transformed Detroit between 1951 and 2010. Previously, its downtown had been surrounded by a high-density street grid. Today, it’s totally encircled by freeways.

Rochester Highway
Rochester is one of many cities opting to undertake freeway removal projects.

As the dotted line above shows, the “moat” surrounding downtown is slowly being removed. The city used reclaimed land from the Inner Loop freeway to construct three mixed-use developments that include below-market-rate units.

The Future of Urban Living: Do Highways Matter?

A new era of living is reconsidering the impacts of these highways on urban centers. As property values rise and existing housing stock is pressured, there are growing concerns over the environmental impacts of suburban life. As a result, urban planners and residents are looking to revitalize city cores and re-purpose land occupied by burdensome slabs of highway concrete.

Since 1987, there have been more than 20 urban highway segments removed from downtown cores, neighborhoods and waterfronts, mostly in North America. The pace of removals has picked up significantly and an additional 10 highways are now planned for removal in the United States.

During the COVID-19 pandemic, American cities have seen their traffic plummet. Rush-hour trips into cities are taking nearly half the time while some are not even commuting at all.

While this situation is likely temporary, it is offering a moment for reflection of how cities operate and whether the car should be at the center of urban planning.

*Hat tip to Shane Hampton, whose 60 Years of Urban Change compilation served as inspiration for this article. Visit that page for many more examples of highway impact on cities.

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Central Banks

The Anatomy of the $2 Trillion COVID-19 Stimulus Bill

A visual breakdown of the CARES Act, the $2 trillion package to provide COVID-19 economic relief. It’s the largest stimulus bill in modern history.

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The Anatomy of the $2 Trillion COVID-19 Stimulus Bill

The unprecedented response to the COVID-19 pandemic has prioritized keeping people apart to slow the spread of the virus. While measures such as business closures and travel restrictions are effective at fighting a pandemic, they also have a dramatic impact on the economy.

To help right the ship, the Coronavirus Aid, Relief, and Economic Security Act — also known as the CARES Act — was passed by U.S. lawmakers last week with little fanfare. The act became the largest economic stimulus bill in modern history, more than doubling the stimulus act passed in 2009 during the Financial Crisis.

Today’s Sankey diagram is a visual representation of where the $2 trillion will be spent. Broadly speaking, there are five components to the COVID-19 stimulus bill:

CategoryTotal AmountShare of the Package
Individuals / Families$603.7 billion30%
Big Business$500.0 billion25%
Small Business$377.0 billion19%
State and Local Government$340.0 billion17%
Public Services$179.5 billion9%

Although the COVID-19 stimulus bill is incredibly complex, here are some of the most important parts to be aware of.

Funds for Individuals

Amount: $603.7 billion – 30% of total CARES Act

In order to stimulate the sputtering economy quickly, the U.S. government will deploy “helicopter money” — direct cash payments to individuals and families.

The centerpiece of this plan is a $1,200 direct payment for those earning up to $75,000 per year. For higher earners, payment amounts will phase out, ending altogether at the $99,000 income level. Families will also receive $500 per child.

There are three other key things to know about this portion of the stimulus funds:

  1. There will be a temporary suspension for any student loan held by the federal government. This means no payments required and no interest accrued until the end of September, 2020.
  2. Borrowers with federally backed loans can request forbearance on mortgage payments for up to six months.
  3. There will be an expansion of unemployment benefits, including a four-month enhancement of benefits. This plan includes freelancers, workers in the gig economy, and furloughed employees.

Big Business

Amount: $500.0 billion – 25% of total CARES Act

This component of the package is aimed at stabilizing big businesses in hard-hit sectors.

The most obvious industry to receive support will be the airlines. About $58 billion has been earmarked for commercial and cargo airlines, as well as airline contractors. Perhaps in response to recent criticism of the industry, companies receiving stimulus money will be barred from engaging in stock buybacks for the term of the loan plus one year.

One interesting pathway highlighted by today’s Sankey diagram is the $17 billion allocated to “maintaining national security”. While this provision doesn’t mention any specific company by name, the primary recipient is believed to be Boeing.

The bill also indicates that an inspector general will oversee the recovery process, along with a special committee.

Small Business

Amount: $377.0 billion – 19% of total CARES Act

To ease the strain on businesses around the country, the Small Business Administration (SBA) will be given $350 billion to provide loans of up to $10 million to qualifying organizations. These funds can be used for mission critical activities, such as paying rent or keeping employees on the payroll during COVID-19 closures.

As well, the bill sets aside $10 billion in grants for small businesses that need help covering short-term operating costs.

State and Local Governments

Amount: $340.0 billion – 17% of total CARES Act

The biggest portion of funds going to local and state governments is the $274 billion allocated towards direct COVID-19 response. The rest of the funds in this component will go to schools and child care services.

Public and Health Services

Amount: $179.5 billion – 9% of total CARES Act

The biggest slice of this pie goes to healthcare providers, who will receive $100 billion in grants to help fight COVID-19. This was a major ask from groups representing the healthcare industry, as they look to make up the lost revenue caused by focusing on the outbreak — as opposed to performing elective surgeries and other procedures. There will also be a 20% increase in Medicare payments for treating patients with the virus.

Money is also set aside for initiatives such as increasing the availability of ventilators and masks for the Strategic National Stockpile, as well as providing additional funding for the Center for Disease Control and expanding the reach of virtual doctors.

Finally, beyond the healthcare-related funding, the CARES Act also addresses food security programs and a long list of educational and arts initiatives.

Hat tip to Reddit user SevenandForty for inspiring this graphic.

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