Why Should I Major in Economics?
Video courtesy of the American Economic Association
No matter what your future plans are upon graduation from college with an economics degree, the breadth and flexibility that you will be empowered with are the valuable assets that will aid you to adapt to an ever-changing world. Studying economics provides you with the tools to think critically about some of the most important issues facing humanity today, such as economic growth, prosperity, poverty, income inequality, social justice, environmental concerns, globalization, and business cycles just to name a few. The theoretical, empirical, and analytical training that you will receive as a student majoring in economics enable you to formulate a better understanding of the major challenges that are going to face you in life, both on the personal and career levels. Upon graduation with an economics degree, you will be well-positioned to understand how decisions are made, how markets work, how economic forces interact, sources of market failures, and available remedies to when markets fail. Furthermore, studying economics gives you a great insight into questions as small as why oranges are becoming more expensive at my grocery store to questions as big as why are some countries rich while others are poor.
This flexibility that you are going to gain, along with the rigorous theoretical and empirical training that you are going to receive, will make you an attractive candidate to job recruiters and a great fit as an applicant to graduate schools and law schools. While majoring in economics may not provide you the required training to do a specific job, it gives you the needed structure to understanding the issues from a bird's-eye view.
Let's explore some of the opportunities that students with economics majors typically pursue.
Careers in the Corporate World and in Consulting
Employers in the corporate world seek employees with certain set of skills, such as effective communication, logical way of thinking, problem solving, and out-of-the-box thinking. While many areas of studies at the college level do an excellent job in developing these skills, economics does a particularly effective job in that regard. Many economics majors therefore end up with job in the financial world, marketing, real estate development, energy industry, and consulting. Economics majors with particularly strong mathematical and analytical skills are often placed in consulting firms where they apply their skills in data analysis to develop models for particular markets.
Although there are many sites that employers use to advertise for job vacancies in the corporate world, we recommend our students to check first for job vacancies posted at the National Association for Business Economics (NABE). Students can find multiple listing by visiting the following link Recent Jobs - NABE's EconJobs.org.
Careers in Government and in International Organizations
The U.S. Government hires thousands of college graduates at all levels and in many areas every year. The most popular site that the government uses to advertise for its job vacancies is usajobs.gov. By entering “economics” as a keyword in the website's search window, one can identify the many jobs for applicants with economics degree that the government seeks to hire at any given point in time. For example, at the time this document was written (July 2022), there were 2119 jobs available for applicants with economics background. Examples of hiring governmental agencies and departments included the Internal Revenue Service, the Department of Justice, the Central Intelligence Agency, the Department of Health and Human Services, The Federal Bureau of Investigation, the U.S. Coast Guard, the Federal Deposit Insurance Corporation, the Department of Commerce, the State Department, the Department of Housing and Urban Development, the Department of the Treasury, the Department of Homeland Security, the Bureau of Labor Statistics, and many others. Furthermore, the Federal Reserve Bank and its affiliates are major employers of students with economics backgrounds.
Economics majors, particularly those with knowledge of other languages and have good communication skills may also be interested in job opportunities with international agencies such as the World Bank, the International Monetary Fund, and the United Nations. These agencies have active internship programs that economics majors may apply to before graduation. They also have entry-level jobs that students can apply to right after graduation. For example, the World Bank has the Young Professional Program (YPP) that prepares those accepted for long-term careers at the organization (click here for more information).
Seeking Post-Graduate Degrees
Upon graduating from college with a bachelor's degree, many students aspire to earn graduate degrees and improve their human capital. Some graduates may enroll in an MBA program, some may decide to go to law school, and some may choose to pursue a graduate degree in economics (MA or Ph.D.) or in any other related field like finance, management, agricultural economics, personal financial planning, and others. No matter what avenue students take to enhance their academic attainment, having a degree in economics provides applicants with strong foundations and technical backgrounds that help with their success.
Economics and LSAT scores: perhaps a good indication of the overall preparation that economics majors receive during their studies is how well they do on the LSAT exam, which is a requirement for admission into law schools. According to a paper published in the Journal of Economic Education by Nieswiadomy in 2017, entitled “LSAT Scores of Economic Majors”, the author shows that the mean LSAT score of students majoring in economics was 158.8, which was the highest score of the 16 largest disciplines in the study. When the author extended the definition of disciplines to include 29 subgroups, economics majors placed second (math/physics scored first with a mean score of 161.7). Note that the mean score on the LSAT is about 151, and the 90th percentile is about 165.
According to the 2022 Occupational Outlook Handbook, which is a publication by the US Bureau of Labor Statistics, the median earning of Americans with an economics degree of all educational levels in 2020 was $108,350. Median earnings ranged from $59,220 at the 10th percentile and $198,230 at the 90th percentile.
The 2022 Occupational Outlook Handbook also lists the median annual income for economists in the top five industries that employ them. Below is a summary based on May 2020 annual income:
|Finace and Insurance||$129,060|
|Scientific research and development services||$122,220|
|Management and technical consulting service||$111,340|
|State and local government||$73,510|
Source: Bureau of Labor Statistics, Occupational Outlook Handbook (visited July 18, 2022)
In terms of earnings of economics majors as compared to other majors, Payscale.com lists the starting salaries and mid-career salaries of 827 disciplines and sub-disciplines of workers who hold a bachelor's degree only. Here are some relevant disciplines and their earnings. For the complete list, please click here.
|Rank||Major||Early Career Salary||Mid-Career Salary|
|3||Electrical Eng, & Computer Sci.||$108,500||$159,300|
|30||Finance and Corporate Accounting||$65,200||$129,600|
|47||Economics and Mathematics||$68,200||$124,800|
|75||Accounting and Economics||$65,900||$118,900|
|81||International Business & Finance||$61,400||$117,400|
Source: Majors That Pay You Back, Payscale.com (Visited July 18, 2022)