Benefits of an Economics Degree
A bachelor's degree in Economics prepares you for a career in a variety of occupations - in business, banking, journalism, international relations, education, government, and the non-profit sector. It is also an excellent preparation for graduate studies - in law, business, economics, public administration, environmental studies, health-care administration, labor relations, urban planning, diplomacy, and other fields. A recent study (Black et al, July 2003) finds that ' among college graduates with no advanced degrees, economics majors generally fare well, earning significantly more than graduates with the most popular major, business administration, and more than other social science majors, humanities majors, and arts majors. Only engineering majors earn significantly higher than economics majors. Among individuals who pursue a master's degree in business or a professional degree in law, those who have an undergraduate economics major generally earn more than individuals with other majors (the only exception being the chemical engineering major as a background for the MBA) '.
Quick Facts
The following chart shows average monthly earnings of the college graduates by their undergraduate majors in 1993.
Source: Survey of Income and Program Participation: 1993
The achievements of the college graduates with economics majors can also be gauged by their performances in scholastic tests such as GMAT, LSAT and GRE. The following table summarizes their achievements vis-à-vis those of others, and provides evidence in support of the findings of the study mentioned above.
Earnings and Graduate Test Score Rankings by Major
|
Composite A |
Annual Earnings B |
GMAT C |
LSAT D |
GRE Combined E |
||||||||
|
Rank |
Median |
|
Rank |
Mean |
|
Rank |
Mean |
|
Rank |
Mean |
|
Rank |
Physics |
1 |
$50,442 |
|
3 |
615 |
|
1 |
157.6 |
|
1 |
1903 |
|
1 |
Mathematics |
2 |
$50,532 |
|
2 |
552 |
|
8 |
157.6 |
|
1 |
1848 |
|
2 |
Economics |
3 |
$48,071 |
|
4 |
557 |
|
6 |
155.3 |
|
4 |
1816 |
|
3 |
Engineering |
4 |
$51,623 |
|
1 |
583 |
|
2 |
152.7 |
|
9 |
1776 |
|
6 |
Chemistry |
5 |
$47,896 |
|
5 |
570 |
|
4 |
154.5 |
|
5 |
1766 |
|
7 |
Philosophy |
6 |
$29,693 |
|
17 |
582 |
|
3 |
156.0 |
|
3 |
1812 |
|
4 |
Computer Science |
7 |
$44,916 |
|
7 |
551 |
|
9 |
15.2 |
|
11 |
1777 |
|
5 |
History |
8 |
$38,272 |
|
14 |
562 |
|
5 |
154.0 |
|
6 |
1655 |
|
11 |
Biology |
9 |
$39,648 |
|
12 |
551 |
|
9 |
153.6 |
|
8 |
1693 |
|
9 |
English |
9 |
$37,614 |
|
15 |
557 |
|
6 |
153.7 |
|
7 |
1662 |
|
10 |
Finance |
11 |
$43,047 |
|
8 |
532 |
|
12 |
152.2 |
|
10 |
1705 |
|
8 |
Accounting |
12 |
$47,793 |
|
6 |
518 |
|
14 |
151.8 |
|
13 |
1535 |
|
14 |
Psychology |
13 |
$40,660 |
|
11 |
527 |
|
13 |
151.9 |
|
12 |
1537 |
|
13 |
Political Science |
14 |
$35,517 |
|
16 |
539 |
|
11 |
151.6 |
|
14 |
1649 |
|
12 |
Management |
15 |
$43,047 |
|
8 |
489 |
|
16 |
149.4 |
|
16 |
1480 |
|
16 |
Marketing |
16 |
$43,047 |
|
8 |
485 |
|
17 |
150.0 |
|
15 |
1480 |
|
16 |
Sociology |
17 |
$38,785 |
|
13 |
507 |
|
15 |
149.3 |
|
17 |
1528 |
|
15 |
A The Composite Rank is computed by taking the average of the other four rankings.
B Median earnings by college majors in 1993. Source: "Earnings of College Graduates, 1993," Daniel Hecker, Monthly Labor Review, December 1995.
C Mean 1998-99 Graduate Management Admissions Test scores by majors. GMAT scores range from 200 to 800. Source: "Profile of GMAT Candidates," Graduate Management Admissions Council, 1999.
D Mean 1994-95 Law School Admission Test scores by majors. LSAT scores range from 120 to 180. Source: "LSAT Scores of Economics Majors," Michael Nieswiadomy, Journal of Economic Education, Fall 1998.
E Mean 1996-99 Graduate Record Examinations scores by intended areas of graduate study. GRE combined scores range from 600 to 1800. Source: "Guide to the Use of Scores," Educational Testing Service, 2000.
On Current Trends and Future Prospects
Wall Street Journal , February 20, 2001
"At schools like Harvard or Columbia ... economics now is the most popular major on campus. ... Even at engineering-oriented Massachusetts Institute of Technology, economics accounts for about one-tenth of undergraduate majors. 'People feel an economics degree is going to be helpful as they decide that their career paths may take them into business schools or consulting or financial markts,' says Richard Clarida, chairman of Columbia 's economics department."
Business Week , August 21-28, 2000
In a special issue on the 21st Century Corporation, Business Week's "Resume for the 21st Century" for "The New Leadership" specified majoring in Economics, and emphasized developing thinking and analytical skills.
On a Lighter Vein
TOP 10 REASONS TO STUDY ECONOMICS
1. Economists are armed and dangerous: "Watch out for our invisible hands."
2. Economists can supply it on demand.
3. You can talk about money without even having to make any.
4. You get to say "trickle down" with a straight face.
5. Mick Jagger and Arnold Schwarzenegger both studied economics and look how they turned out.
6. When you are in the unemployment line, at least you will know why you are there.
7. If you rearrange the letters in "ECONOMICS", you get "COMIC NOSE".
8. Although ethics teaches that virtue is its own reward, in economics we get taught that reward is its own virtue.
9. When you get drunk, you can tell everyone that you are just researching the law of diminishing marginal utility.
10. When you call 1-900-LUV-ECON and get Kandi Keynes, you will have something to talk about.
References:
Black, Dan A, Seth Sanders and Lowell Taylor , 2003, "The Economic Reward for Studying Economics," Economic Enquiry , vol. 41(3): 365-377
Educational Testing Service, 2000, "Guide to the Use of Scores"
Graduate Management Admissions Council, 1999, "Profile of GMAT Candidates"
Hecker, Daniel 1995, "Earnings of College Graduates, 1993," Monthly Labor Review , December
Nieswiadomy, Michael 1998, "LSAT Scores of Economics Majors," Journal of Economic Education , Fall
http://www.fiu.edu/orgs/economics/econfacts.html
http://netec.wustl.edu/JokEc.html
