How international students boost local economies and job markets in the US

International students in the US have long been seen as an academic asset, but their contribution goes far beyond the classroom. In fact, they play a significant role in boosting local economies, supporting jobs, and fueling growth in various sectors.

As of the 2023-2024 academic year, international students contributed a staggering $44 billion to the US economy, underscoring their importance to both universities and local communities.With over 1.1 million international students enrolled in US colleges and universities, their economic footprint extends to all 50 states. While tuition fees are the most obvious financial input, international students also spend money on housing, food, transportation, and entertainment, directly benefiting local businesses.

As reported by The Washington Post, experts warn that any disruption in student visa policies could have far-reaching consequences for both universities and the broader economy.States benefit from international student spendingInternational students bring significant economic benefits to the states they study in. California, which hosts the largest number of international students, saw nearly 141,000 students contribute $6.4 billion to its economy.

The state's vast network of universities, restaurants, and retail businesses relies heavily on international students’ spending power. Massachusetts and Texas, with 82,000 and 90,000 international students respectively, are also major beneficiaries.

According to data from NAFSA, the Association of International Educators, Massachusetts received $3.9 billion, while Texas saw $2.5 billion in contributions during the last academic year.The contribution of international students across a few key states:

“The economic impact of international students goes beyond tuition,” said Nicholas Barr, a professor at the London School of Economics, in an interview with The Washington Post. “They pay rent, they go to restaurants, and they travel. It’s money flowing into the local economy, creating jobs and supporting small businesses.”Job creation and local business supportLocal businesses, particularly in areas near large universities, experience a notable uptick in revenue due to the presence of international students.

From coffee shops to transportation services, these students support a range of industries. With international students spending on goods and services, jobs are created not only at universities but also in surrounding areas. As Barr pointed out, extra staffing is often needed at restaurants, bars, and retail stores to accommodate the influx of students and their spending.A recent report from The Washington Post highlighted that real estate markets also depend heavily on student renters.

Many landlords rely on international students to fill rental units, particularly near universities. A sharp decline in international student enrollment could lead to vacancies and a slowdown in the local housing market, potentially affecting both businesses and homeowners.Visa restrictions could disrupt economic balanceThe ongoing pause on new student visas, initiated by the Trump administration, has raised concerns among economists and university officials.

As quoted by The Washington Post, Constantine Yannelis, an economics professor at the University of Cambridge, warned that a reduction in international students would harm not only universities but also local economies. “The loss of international students would affect everything from real estate to restaurants and pretty much any business that relies on consumer demand,” he said.With international students typically paying higher tuition fees than domestic students, universities might struggle to replace this revenue if visa restrictions continue.

Yannelis further cautioned about the long-term consequences, noting that many US entrepreneurs began their careers as international students. “A huge portion of American entrepreneurs are international, and many of them started their careers as students in the US,” Yannelis added.As the debate over visa policies continues, the impact of international students on the US economy remains undeniable. While universities and businesses hope for a return to normalcy, experts stress the importance of keeping US educational institutions attractive to global talent, which contributes not only to academic achievement but also to economic prosperity.