Our last post discussed the foreign travel trade balance—that is, money spent by foreigners for tourism, business, and education in the U.S. compared with what Americans spend abroad. In this post, we focus on travel for education. The Bureau of Economic Analysis began including travel-for-education data only recently, when they made their last big revision to GDP data. In fact, the BEA has recomputed these data for the past several years, so we can compare the old and new series to get a sense of the education trade balance. (This is a much more convenient process than adding up all the expenses of foreign students, so thanks BEA!)
The FRED graph above makes it quite apparent that foreign students spend much more in the U.S. (3.5 times more) than American students spend abroad. In fact, the surplus for the last month of available data, $3.3 billion in September 2017, is about 7% of the overall trade deficit at the time and 12% of the trade deficit with China. Obviously, this surplus is quite substantial—with the bonus of having top international students study in the U.S., and possibly remain as part of the U.S. economy, after having their education paid by funds from abroad.
How this graph was created: Search for “travel trade,” select the exports series that includes education travel, and click “Add to Graph.” From the “Edit Graph” panel, add the export series that removes education travel and apply formula a-b. Repeat for the imports series.
Suggested by Christian Zimmermann.
View on FRED, series used in this post: