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Why major in Economics?

(Information courteous of American Economic Association website: www.aeaweb.org/students/)

For more information on careers in economics, please visit the American Economic Association webpage at https://www.aeaweb.org/resources/students/careers/video/career-in-economics

 

Economics majors are successful in a wide variety of careers. Although various roles in businesses are most common, economics majors are successful in law, medicine, government, non-profits, and international relations, as well as in academic roles.

 

Reason 1: Career Earnings

A Wall Street Journal article estimated average starting salaries by discipline for 2008. (Anjali Athavaley, “For Class of ’08, A Scramble of Jobs,” Wall Street Journal, April 8, 2008, D1, 3.) Economics came in fourth among 16 majors at $43,419. Above economics were computer programming, and mathematics with engineering at the top with $49,707. Accounting was just below economics at $42,104. Management Science was seventh at $40,592 followed by finance and marketing.

Table 1: Average Starting Salary Offers to Inexperienced Bachelor’s Degree Recipients by Curriculum, Summer 2007

Baccalaureate Curriculum

Salary

Chemical Engineering

 $59,361

Electrical/electronics Engineering

$55,292

Computer Science

 $53,396

Civil Engineering

 $48,509

Economics

 $48,483

Finance

 $47,239

Accounting

 $46,718

Business Administration/Management

 $43,701

Chemistry

$41,506

Marketing

 $40,161

Biological/Life Sciences

 $34,953

History

$33,768

Sociology

$32,033

Psychology

$31,631

Source: Nathan E. Bell, Nicole M. Di Fabio, and Lisa M. Frehill, “Salaries of Scientists, Engineers and Technicians: A Summary of Salary Surveys.”

The Commission on Professionals in Science and Technology (CPST: Washington, DC 2007) selected curricula from page 8.

 

A Comparison of Mid-Career Earnings:

 

Median Earnings with BA/BS

Percent with

 

Female

Male

Graduate Degree

Social Science

Economics

$57,000

$74,000

40

Political Science & Government

$49,000

$63,000

47

Psychology

$41,000

$53,000

43

Sociology

$42,000

$54,000

34

Business

Accounting

$55,000

$75,000

24

Finance

$52,000

$70,000

26

Management

$50,000

$64,000

20

Marketing

$48,000

$65,000

14

Engineering

Architecture

$55,000

$65,000

32

Chemical Engineering

$72,000

$92,000

45

Civil Engineering

$62,000

$80,000

35

Electrical Engineering

$70,000

$86,000

42

Mathematics & Computers

Computer Science

$70,000

$79,000

28

Mathematics

$54,000

$75,000

47

Taken from: Anthony P. Carnevale - Jeff Strohl - Michelle Melton, The Economic Value of College Majors, Georgetown University, Center on Education and the Workforce
http://cew.georgetown.edu/whatsitworth/

 

Reason 2: MBAs and the Corporate World

Although the economics major does not provide training for specific occupations, it provides the logical structure that pays off in understanding the big picture, the context for entering several fields in the corporate world. Its emphasis on logical thought and problem solving skills has universal value. Many employers seek to hire graduates with these skills.

The better MBA programs give some preference in admission to applicants with technical backgrounds including engineering, physics & math, and economics. Undergraduate study in business then is not a primary or even necessarily a desirable path to an MBA. Of course, people who have developed their own successful businesses or enjoyed considerable success in other ways also tend to be attractive to MBA recruiters. The schools value success in many forms.

 

 

Reason 3: Going into Law

The economics major is one of many common paths to law school.  In fact, among the eight disciplines with more than 3,000 students taking the LSAT, the 4,163 economics majors received the highest average score at 156.6 as shown in the table!

Table 2: Average LSAT Scores by Major, 2002-03.

Rank

Major

LSAT score

# of takers

1

Economics

156.6

4,163

2

Engineering

155.4

3,367

3

History

155.0

4,716

4

English

154.3

6,265

5

Finance

152.6

3,492

6

Political Science

152.1

15,023

7

Psychology

152.1

5,164

8

Criminal Justice

144.7

3,433

 

Total (all categories)

152.2

94,391

 

Taken from: Michael Nieswiadomy, "LSAT Scores of Economics Majors: The 2003-04 Class Update," Journal of Economic Education 37 #2, Spring 2006. Pp. 244-7.

 

Reason 4: Working for the Government

Governments at every level hire economists to manage and evaluate their operations. The Office of Personnel Management(OPM) of the Federal government provides information about Federal employment opportunities. Their USAJobs site lists thousands of openings of all kinds in many locations across the country. Search on "economist" to find information about specific current opportunities. There are often openings for economists with BA, MA, and PhD degrees.

The OPM website also gives general information about Federal pay scales. BA economists with little experience are (to simplify a bit) at grade GS-7, with MAs at GS-9, and new PhDs start at GS-12. Although pay does differ with the cost of living in different locations, BA economists started at $31,209 or above in 2006.

The Federal Reserve Board and its affiliated regional Federal Reserve Banks also hire economists and research assistants at various levels of education. Skill with statistics and in managing data will be helpful for many entry jobs.

Economists are valued in the Foreign Service and civil service in the State Department, and as analysts with the Central Intelligence Agency.

 

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