Idaho’s International Students Make Significant Economic Impact

International student enrollment around the country has helped shore up enrollment at many colleges and universities while pumping money into local economies.

Analysis shows that sponsored foreign students add more than $98 million to Idaho’s Gross Domestic Product (GDP) and create as many as 1,565 jobs – 582 direct jobs in the education sector and 983 additional jobs across various industry sectors due to the indirect effect of inter-industry spending and the induced effect of household spending.

International student enrollment has been strongest at Idaho State University (ISU), but for a variety of reasons, that number may begin declining.

A March 2016 New York Times article reported tension building among some of the ISU international students, faculty and the community resulting in students leaving the area for other schools.

In addition, with the King Abdullah Scholarship Program for Saudi Arabian students announcing deep funding cuts, there is the sense that the state of Idaho could be dealing with significant financial losses in the foreseeable future.

How Many Foreign Students are in Idaho?

Open Doors Data, a database managed by the Institute of International Education in partnership with the Bureau of Educational and Cultural Affairs, keeps a yearly record of all foreign students in the United States. Their records show that in spring 2015, a total of 4,592 international students were enrolled in postsecondary institutions across the state. This has not always been the case. The foreign student enrollment in the state hovered around 2,000 for several years. Following a spike in enrollment in the 2011-2012 academic year, the growth rate has – to date – increased exponentially.IS-chart-1

A breakdown of enrollment by institution shows Idaho’s sudden increase of foreign students stem largely from the rapid growth of the international student body at Idaho State University, particularly the increased enrollment of Saudi Arabian and Kuwaiti students in the institution. According to ISU fact sheets, international students now account for approximately 12 percent of the total student population on campus with Saudi Arabian and Kuwaiti students accounting for 79 percent of all international students. Saudi Arabian and Kuwaiti nationals accounted for 17 percent of the foreign students in Idaho in the 2010 academic year. By the end of the 2014 academic year, this percentage had risen to 45 percent, and ISU had become the institution with the highest number of international students in the state. (Source: Open Doors: Report on International Educational Exchange 2010 -2015.)

IS-chart-2There are a number of reasons why sponsored students have chosen to congregate in Idaho. In addition to less stringent admission requirements and word-of-month recommendations from other foreign residents, the cost of living in the state is a major pull. With a living wage of $9.89 an hour (see, Idaho is No. 10 on the list of the most affordable states for a single adult. This ensures students can get the most stretch out of their fixed stipends and maintain a relatively comfortable lifestyle.

What is the Economic Impact of Foreign Students in Idaho?

An independent analysis conducted by the National Association of Foreign Student Advisers for the 2014-2015 academic year, showed international students and their families at colleges and universities across the U.S. contributed $30.5 billion to the U.S. economy and supported 340,000 jobs. Their contribution to Idaho’s economy is estimated to be $116 million dollars and a total of 1,156 jobs – 516 direct and 640 indirect/induced – supported by foreign student spending.

Using IMPLAN, an economic tool, further details can be extracted on how the impact of international students is distributed throughout the economy. Analysis conducted was restricted to sponsored students, such as international students receiving funds from sources outside of the United States, including personal and family sources as well as assistance from their home country governments or universities. An Open Doors 2015 report estimates 72 percent of all international students in the United States are sponsored. At ISU, 79 percent of the international students are sponsored Saudi Arabian and Kuwaiti meaning the 72 percent estimate is conservative. A sponsored student at ISU may earn a monthly stipend of $1,800 which translates to a yearly household income of $21,600.

Limiting the economic impact study to Bannock County, analysis shows the direct impact of more than $22 million in out-of-state tuition expenses alone at ISU translates to 304 jobs added to the educational services sector. This is assuming that the revenue generated is applied directly to employing university faculty and staff. As shown in Table 1, the ripple effect is an additional 128 jobs in other sectors, resulting in a total employment impact of 432 jobs in the county. The total value added, similar to GDP, is $15.8 million, and the state benefits from an additional $1.7 million in state and local taxes. When the analysis includes household stipends in addition to tuition expenses, the total impact climbs to 647 jobs and an economic growth of $27.8 million.IS-Table-1

In estimating the total tuition expenditure of international students across the state, the analysis assumes an out-of-state tuition of $18,151.38 per academic year – an average of eight major colleges in the state with the most international students. Assuming that 72 percent of the international students are sponsored and assuming the same monthly stipend for all international students in Idaho, the impact of international students translates to a total of 1,565 jobs -582 direct jobs and 983 indirect/induced jobs. Another way to look at it is that approximately one job is potentially being created for every three international students in the state. While the jobs created span across all industries, the highest number of jobs are in higher education, real estate, restaurants, retail and hospitals.IS-table-2

Table 3 shows a summary of the direct, indirect and induced impact of tuition and household expenditure of international students in the state. The total value added to the state is estimated at $98.2 million, $61 million in labor income and a total economic output of $183.5 million.IS-table-3

The analyses highlight the positive economic impact and jobs created by sponsored international students. The promotion of Idaho’s higher education to these students could lead to more job development and a stronger economy in Idaho., regional economist
Idaho Department of Labor
(208) 557-2500 ext. 4331