Is Economics a Good Major? Salary, Job Opportunities & Requirements
Economics plays a role in virtually every aspect of our daily lives, affecting the decisions we make. Even something as simple as a trip to the grocery store is a reflection of human demand and the need to satisfy our everyday needs. In the same way, producing outputs at work is part of a cycle to supply the market with necessary products and services. Economics can also determine a people's standard of living, based on a region's access to resources and the way a government distributes goods and services to its citizens.
This article delves into the details of economics, including its definition and what is included in economics courses. It provides students with the answers to frequently asked questions about economics degrees, such as "What can I do with an economics degree?", "What do I need to know to pursue an economics degree?", "How much will I earn as an economist?", and finally, "Is an economics degree worth it?" Through this article, readers can make an informed decision about whether economics is the right path for them and the opportunities that it can bring in the professional world.
What Can You Do with an Economics Degree Table of Contents
- What is Economics?
- What will I learn in Economics?
- Key Economics Statistics
- What are the requirements to study Economics?
- How long does it take to finish an Economics degree?
- How much does it cost to study Economics?
- The Best Universities to Study Economics
- Possible Careers for Economics Majors
- How much do Economists earn?
- Famous People Who Studied Economics
What is Economics?
Economics is a social science that aims to quantify the production, distribution, and consumption of resources (Blaug, n.d.), be it financial wealth, natural resources, or goods and services in the market. It centers on how countries, regions, industries, and individuals frame their decisions based on the supply and demand for resources (Chappelow, 2019). In doing so, the strengths and weaknesses of those decisions are realized while the opportunities and threats stemming from the same are brought to light.
Economics can be broken down into two main branches--microeconomics and macroeconomics. Though there are major differences between macroeconomics and microeconomics, the factors surrounding each, in many cases, affect the other.
- Microeconomics deals with industries, companies, and individual consumers. It tackles product pricing, price factors, consumer behavior, the effects of pricing on various demographics, and the groups that create the supply and demand in the market (Chappelow, 2020). From the inside looking out, microeconomics focuses on the moving parts that supply information to be used in macroeconomics.
- Macroeconomics centers on economies and their behavior, performance, and structure. It tackles phenomena that affect an economy as a whole, which include the gross domestic product, inflation rate, unemployment rate, sovereign debt, and economic growth (Chappelow & Segal, 2019).
Given that economics reflects human life and the activities surrounding it, various schools of thought have arisen based on perceived factors that hold the most influence over economic trends. And sometimes those theories run counter against one another. For instance, neoclassical economics posits that customer perception is the most significant driver of pricing whereas, in classical economics, the cost of production is the biggest influencer (Kenton, 2019).
There are also cases when economic theories converge with theories from other disciplines, given the sheer vastness of economics as a study. A good example would be their close ties with sociology, which brought forth three contemporary concepts, namely market economics, the economics of society, and social economics (Zafirovski, 2013).
With the growth of economics as a field, it has encapsulated other subjects like mathematics, business management, financial management, and data analytics, among many others, in applying its concepts (Times Higher Education, 2019). It has also led to the diverse skillsets of those who engage in economics, transferable to jobs even outside of the economics sphere. This means that professional opportunities for economics majors are in abundance in the job market (Tucker, 2019).
What will I learn in Economics?
In a good undergraduate economics program, students develop an ability to think critically: They gain broadly applicable analytic and quantitative skills that improve decision-making in a wide range of tasks. In short, it may be that economics majors are better trained than many other majors in skills that have returns in the marketplace (Black et al., 2003). Taking an economics major can also help students understand the underlying factors of poverty in American schools.
Bachelor of Science (BS) degrees are more concentrated on mathematics, sciences, statistics, and econometrics in relation to the subjects covered (Aarons, nd). They are more geared towards learners who have a more straight-laced approach to economics, say, those who intend to take a master's degree or a Ph.D. Meanwhile, bachelor of arts (BA) courses, while also heavy on mathematics, place more emphasis on economic theories and entail a broader set of competencies learned and then applied. BA students are considered more "real-world ready" upon graduation (Aarons, nd).
You will find that undergrad salary and types of econ majors varies. Regardless of which type of economics degree a learner pursues, a lot of mathematics will be encountered since students will have to compute for values like GDPs and inflation rates, learn the mathematical relation between and supply and demand, and the like. On top of such, since economics is a broad field, students are also expected to learn the differences of finance vs economics and take subjects on politics, history, and language (Times Higher Education, 2019).
In regard to the major subjects, the areas of economics that students will likely encounter include:
- Development economics. This field centers on the ways to foster economic growth, improve wealth distribution, address supply and demand issues, and reduce a nation's unemployment (Tucker, 2019).
- Labor economics. This area of economics focuses on the labor market, the behaviors of its moving parts, the salaries and wages of workers, and finding solutions to challenges and issues.
- Science economics. Science, technology, innovation, and their impact on various sectors are the primary subjects of this field of economics.
- Urban economics. This area of economics tackles the development in cities, the impact of infrastructure, and the policies involved.
- Organizational behavior. This field discusses management styles, office communications, and the effects of behaviors in the workplace.
- Game theory. This area of economics analyzes the behaviors, reactions, and decisions of various parties bound by a set of laws and policies (McNulty, 2019).
- Tax policy economics. With tax being a constant through nearly every purchase, this area of economics zones in on the systems and laws surrounding taxation as well as how taxes influence prices and consumer behavior (Tucker, 2019).
Key Economics Statistics
- Research investigating the delivery of economics curricula at universities in Australia, Canada, and the United States have found that in the post-World War II period, increasing emphasis has been placed on formalization in economics teaching, especially with the use of mathematics (Akbari & Aydede, 2015).
- (According to the Integrated Postsecondary Education Data System data, which summarize trends in bachelor’s degrees conferred in first and second majors in the United States): An average of 26,500 degrees were conferred to economics majors per year. Economics is more popular among second than first majors (Stock, 2017).
- In 2016, around 40% of majors in Middlebury College are taking up economics due to the lack of a business major (Colander, 2016).
- Majors in other social sciences earn 13% less than demographically comparable economics majors (Black, Sanders, & Taylor, 2003).
- Business administration majors earn 11% less than economics majors (Black et al., 2013).
- In 2010, an estimated 79.8% of colleges in the U.S. offered economics programs, and the top 100 schools accounted for 61% of all economics majors (Carroll, Assane, & Busker, 2014).
- At the 10th percentile, accounting majors earn 10.7% more than economists, but at the 90th percentile, economics majors earn more than accounting majors by 11.4% (Black et al., 2013).
- Only one-third of all economics bachelor's degree earners in the U.S. are female (Ahlstrom, 2017).
What are the requirements to study Economics?
Mathematics figures heavily in economics so it is one of the primary determinants to enter an economics course. In the U.S., a BS degree requires math up to calculus while a BA degree requires math up to statistics (International Student, nd). BS degrees are more math-intensive. BA degrees, on the other hand, come with more qualitative modules on other fields like sociology and language. Regardless of economics degree, however, students are expected to have some knowledge on how to use statistics to solve certain issues or apply math in microeconomic and macroeconomic problems.
Writing is another requirement since students will be writing academic essays and reports that contextualize their research along with related knowledge found in other academic papers (International Student, nd). Test and exercise questions that would require essay answers are also frequent.
Economic subject requirements may vary per university, but generally, knowing at least the basics of micro and macroeconomics is an advantage. Taking up elective classes related to economics will also help students understand and appreciate the concepts discussed in major subjects (International Student, nd), as well as aid them in their research and analysis of economies.
To be more precise, many bachelor's economics programs in the United States require a grade point average of around 2.5. As for admission materials, aspirants are usually required to submit an accomplished application form, transcript of grades, two to three recommendation letters coming from former high school teachers, and documents containing the applicant's ACT or SAT scores. An application fee of $20 to $100 will be paid (Best Colleges, nd).
In the United Kingdom and other parts of Europe, high school graduates who have A-level grades have an advantage when entering college, with AAB as a typical requirement among universities (Universities and Colleges Admissions Service, nd). Other possible requirements include Scottish Highers, vocational courses, and a Higher National Diploma or at least a Higher National Certificate (The Economics Network, nd).
How long does it take to finish an Economics degree?
Colleges and universities normally offer four-year undergraduate economics degrees (Times Higher Education, 2019). Students get to pick between a BS or a BA degree. Having a BS degree can possibly lead to a career as an economist, educator, or researcher (Aarons, nd) while BA degree-holders can obtain work experience as a financial analyst, labor relations specialist, investment analyst, and a stockbroker (FindUniversity, nd).
Should they wish to pursue post-graduate education, a master's degree in economics can be completed in one or two years (Best Colleges, nd) and a doctorate degree takes around five to seven years to finish (Duda, 2015).
How much does it cost to study Economics?
Higher education costs in the U.S. vary wildly, and this applies to economics degrees. The tuition fees range from $8,000 to $60,000 per year (Career Igniter, nd). In public universities, students from within the state are granted discounts for education while it is not a given to private ones. For instance, in-state students may pay around $7,500 per semester while those out of state have to shoulder a fee of $19,000. On the other hand, Yale University, a private institution, has an annual fee of $37,600 (Career Igniter, nd). Students who prefer to learn at home can also go for an online program offered by universities.
Before opting to pursue an economics degree, or any degree for that matter, it is advisable to apportion a budget for it or invest in an educational plan. In this way, sizable debts can be avoided, especially that it takes around three to four years to complete an undergraduate economics course. On average, students who graduate from four-year programs accumulate debt amounting to $132,860 (Times Higher Education, 2020).
The Best Universities to Study Economics
Based on the 2020 Quacquarelli Symonds (QS) World University Ranking by Subject, which measures schools' academic reputation, employer reputation, and research merit, universities from the U.S. and the U.K. rounded up the top 10 (Lane, 2020). The U.S. has an impressive 103 schools in the ranking while Europe accounts for 215. Asia has 94, South America 25, Oceania 29, and Africa 7.
For the third consecutive year, Harvard University from the U.S. claimed the top spot in the 2020 QS World University Ranking for Economics list.
- Harvard University (United States). Earning a perfect score for employer reputation, Harvard University is world-renowned for its academic pedigree and excellence. This private school has produced eight U.S. presidents, 359 Rhodes scholars, and 242 Marshall scholars (Top Universities, nd). Campus-based and online economics courses are offered.
- Massachusetts Institute of Technology (MIT) (United States). As the overall best university in the QS World University Ranking, MIT extends its academic excellence to its economics programs. This private university's researchers have spearheaded innovation and development across a wide variety of fields, including technology, healthcare, reducing poverty, and preserving the environment (Top Universities, nd).
- Stanford University (United States). Stanford is at the forefront of innovation and technology, with many of the corporate giants in Silicon Valley founded and led by Stanford alumni. Hailed as the second-best university in the world by the QS overall ranking, this private school's research output is staggering and is home to 18 interdisciplinary research institutes (Top Universities, nd).
- University of California, Berkeley (United States). One of the most highly regarded schools in the U.S., the University of California, Berkeley is a public research university that has produced 19 Nobel prize winners, some of which are for economics. George Akerlof, an alumnus, was awarded the 2011 Nobel Prize for Economics for his research on the ill effects of buyers and sellers having access to different information (Times Higher Education, nd).
- London School of Economics and Political Science (LSE) (United Kingdom). LSE is tied for the fifth spot in QS' ranking for economics, and for good reason. This public university is heralded as one of the foremost institutions for economics and other social sciences in the world. It has also earned a reputation for facilitating world-leading research, having the highest percentage among all U.K. universities (Top Universities, nd).
- Princeton University (United States). Sharing the fifth spot with LSE, Princeton is known for being one of the world's foremost research universities. The public university is linked to more than 40 Nobel laureates and has demonstrated its commitment to administering knowledge as a member of the acclaimed Ivy League (Times Higher Education, nd).
- University of Chicago (United States). The University of Chicago has made huge contributions to contemporary economics. In fact, this private research university has established revolutionary economic theories and pioneered sociology scholarship (The University of Chicago, nd). It also earned a total score of 376.7 in the Shanghai World Ranking of Universities in terms of economics (Shanghai Ranking, nd), making it the world's top university for economics in that ranking system.
- Yale University (United States). As an Ivy League member, Yale is known for its excellence in teaching and the strength of its educational programs. Its holistic approach to education sees students complete a liberal arts curriculum prior to selecting a major. Subjects on writing, reasoning, and languages are embedded in the curricula (Times Higher Education, nd).
- University of Oxford (United Kingdom). Known as the oldest university in all English-speaking nations, the University of Oxford is home to 44 colleges and the U.K.'s biggest library system (Top Universities, nd). This school was hailed as the world's top university in 2020 by Times Higher Education, with its large student population and high research output.
- University of Cambridge (United Kingdom). Rounding up this list is the fourth-oldest university in the world. The University of Cambridge boasts more than 100 libraries and nine world-renowned museums. It is also highly regarded in the fields of teaching and research, producing a slew of distinguished scientists, lawyers, politicians, and mathematicians (Top Universities, nd).
Source: Shanghai Ranking 2020
Possible Careers for Economics Majors
Economics, like other liberal arts majors, is designed to provide students with general liberal arts skills. The economics major provides students with broad insights into how the economy works (Colander, 2016). Although it makes no attempt to teach students the specific skills and knowledge needed in business or finance, the skills and competencies acquired from an economics degree, such as data analysis, research methods, and problem-solving, are transferable to a wide variety of fields. This lends to the wide spectrum of jobs for economics majors that they can excel at (Conerly, 2015).
- Economist. Being a professional economist is the target of most economics majors since the major subjects of economics degrees are in preparation for becoming an economist. Economists monitor economic trends, conduct research on economic factors, analyze data, give data-driven forecasts, and provide insights based on research and data (StudentScholarhips, nd).
- Market research analyst. These professionals leverage their knowledge of economics and marketing to determine the sellability of products and services under a variety of economic conditions. Market research analysts conduct a lot of research and present thorough reports with graphic representations (Profita, 2020, Best Colleges, nd).
- Financial analyst. Financial analysts deal with anything and everything that involves financial assets. They analyze organizations, industries, investments, stocks, bonds, and legal tender. Research and analysis are performed before they give their recommendations to clients or the companies they work for (Profita, 2020).
- Accountant. Accountants keep and maintain the financial records of companies and clients. They are also expected to interpret financial data, recommend financial solutions, prepare tax returns, analyze risks, and find ways to minimize operational costs (Miller, 2019).
- Statistician. Data and analysis are at the center of a statistician's occupation. Statisticians are tasked to conduct research on various fields, record and update data, analyze the results, and present their findings to clients or the companies they work for. They also provide recommendations based on the trends that they have identified and monitored (AGCAS editors, 2018).
- Actuary. Actuaries are concerned with assessing risks and finding ways to avoid them or at least minimize their likelihood. To do this, they have to use a lot of math, conduct studies, and prepare reports based on their findings. Given their diverse competencies, they can work in a wide variety of fields, which include finance, healthcare, insurance, and software development (AGCAS editors, 2020).
- Management consultant. An abundance of planning and strategizing comes with the role of a management consultant. This professional analyzes organizations and operations, and then helps in planning and executing projects. Besides these, management consultants can give recommendations on how to streamline operations and make ongoing projects more efficient (McKay, 2020).
- Policy analyst. Economics majors with a background in political science are welcome to enter this profession. Policy analysts assess, improve, and/or implement policies, laws, and regulations. They often work with government agencies or local government units, with their research and findings being the basis for the laws and ordinances passed by politicians (Profita, 2020).
- Economics professor. BS economics degree holders who have a penchant for imparting knowledge have the academe as a worthwhile option. Mastery of economic theories and applications is required, so it is advisable for learners to obtain a PhD should they intend to scale the ranks of the industry. Besides teaching, professors can also conduct their own studies and write academic papers to improve the industry or field of their choosing (Wharton University of Pennsylvania, nd).
- Data scientist. Data scientists have the uncanny ability to extrapolate strategies and solutions from the data they analyze. With the use of machine learning tools that extract data, they can provide predictions in regard to consumer behavior, product sellability, and promotional values, among many others. They can work in a wide range of industries, including retail, finance, and technology (AGCAS editors, 2019).
Source: Business Insider, Emolument
How much do economists earn?
Many aspirants ponder, "What are the highest paying majors?" Economics happens to be a part of that tier. Carnevale et al. (2011 as cited in Carroll et al., 2014) compared and contrasted individual college majors based upon the average salary of each specific major and which field each major tended to enter. Economics major salary was highest, with median earnings of $76,776; they tended to enter occupations of management, finance, sales, general office, and general business, with management being the most likely and general business being the least likely.
In 2019, the median economics degree salary increased to $105,630 per year and posted a job outlook growth of 8%, according to the Occupational Outlook Handbook of the U.S. Bureau of Labor Statistics. There were also 21,000 jobs with an economics degree available in 2018 (U.S. Bureau of Labor Statistics, 2020).
Famous People Who Studied Economics
A lot of government and business leaders hold a degree in economics, which has helped shape their understanding of how modern economies work and thrive, be it in the industrial or national level. This is expected since at least some knowledge of economics is essential for them to perform their jobs. The more surprising entries on this list are those who are in the fields of sports and entertainment (Merrimack College, nd).
- Donald Trump (U.S. president and business leader)
- Elon Musk (business leader)
- Ronald Reagan (U.S. president)
- George W. Bush (U.S. president)
- Warren Buffet (business leader)
- Kofi Annan (U.N. Secretary-General)
- Arnold Schwarzenegger (governor and actor)
- Cate Blanchett (actress)
- Lionel Richie (singer)
- David Emerson (Canadian foreign affairs minister)
- Paul Newman (actor)
- David Rockefeller (business leader)
- Mick Jagger (singer)
- Ryan Fitzpatrick (hockey player)
- Scott Adams (cartoonist)
- Steve Ballmer (business leader)
- Ted Turner (business leader)
- Tiger Woods (golfer)
- William Shatner (actor)
Answering the question "Is economics a good degree?" given what has been discussed in this article is quite easy. A degree that seeks to analyze how governments allocate resources and the manner in which industries produce goods (Chappelow, 2019) will never lose its relevance since it reflects real-world experiences and offers solutions to improve such. Not only is it a good course for learning, but it also allows learners to develop skills that are useful in various industries, even those that are only tangentially related to traditional economics (Conerly, 2015).
Pursuing economics can come at a high price if a student opts to study in a prestigious private university, with the tuition fee average having a ceiling of $60,000 per year (Career Igniter, nd) and economics degrees typically lasting for four years (Times Higher Education, nd). However, learning from a renowned university grants learners access to world-class economics programs, which has produced a laundry list of Nobel Prize winners and luminaries in the fields of economics, business, and the academe, among many others.
For instance, Harvard University, the world's best economics school according to the 2020 QS World University Rankings, has produced eight U.S. presidents and more than 300 distinguished scholars (Top Universities, nd). Students are assured of a program that has propelled serious learners to the top of their industries or at least at a level on which they have succeeded financially.
The question now is if the added costs of entering a prestigious private university worth the trouble when there are more affordable options available. It really depends on what students intend to pursue. Should they want to pursue economics major jobs, taking the prestigious route is advisable considering the stiff competition in the professional sphere (Brendan, 2018). Finishing an undergraduate degree and master's degree and obtaining a Ph.D. at any of the top universities affords learners a distinct advantage over their competitors. Earning back what they paid for in college will not take too long since the highest paying jobs for economics majors, on average, have a salary of $105,630 per year (U.S. Bureau of Labor Statistics, 2022).
Lastly, to answer the question "What can I do with an economics degree?" learners can do so much more with their economics degree than being economists. The jobs with economics degree they can enter include being a market research analyst, financial analyst, accountant, and university professor (Profita, 2020; Wharton University of Pennsylvania, nd; Miller, 2019; AGCAS editors, 2018). All the aforementioned jobs in economics are prestigious, in-demand, and come with respectable compensation. In fact, having fulfilling careers in economics is possible for economics majors, as long as they take their studies seriously. You can even further yourself in the professional world by taking up one of the best online master's degrees in economics.
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