U.S. President Ronald Reagan, who held that office from 1981-1989, famously joked that if a Trivial Pursuit game were designed by economists, it would have 100 questions and 3,000 answers. It was a sharp jab at the profession, which he knew a little something about. In 1932, Reagan earned a bachelor’s degree in economics from Eureka College in Illinois and put that degree to use decades later in the White House, initiating a conservative set of policies known as Reaganomics that is still studied today.
It turns out there are lots of things you can do with an economics degree, including becoming president. But if you don’t have eyes on the Oval Office, a bachelor’s, master’s or doctorate degree in economics opens the door to careers in other areas of government, business, law, medicine, international relations, nonprofits and academia.
It’s also a lucrative career path. The median annual salary for economists is $104,340, according to the U.S. Bureau of Labor Statistics, which defines an economist as someone who studies the production and distribution of resources, goods and services by collecting and analyzing data, researching trends and evaluating economic issues.
During a November 2017 interview at New York University’s Stern School of Business, Janet Yellen, then outgoing chairwoman of the U.S. Federal Reserve, explained that she decided to be an economist while an undergraduate student at Brown University. “I always liked math, but then I discovered economics,” she said. “It’s a field that does use rigorous analytical techniques, empirical methods and modeling that requires math. What I loved about economics is that it is also a field that has an impact on and is concerned with social welfare and economic well-being. So, it was a combo of being about people and their lives…and it used math and reasoning.”
Sure, you have to take a lot of math in college, but it’s worth it when you go looking for your first job. “The economics major has a strength in finding work: everyone knows that you have to be smart to be an economics major. (If you’re an econ major, you know this isn’t true. But don’t tell anyone, because most of the world finds economics mysterious and figures that we are really smart. It’s a useful myth.),” economist Bill Conerly wrote in Forbes.
Ann Wang is a rising sophomore at Wharton who is majoring in economics. She hopes to land a job that puts her “at the intersection of business, technology and creativity” when she graduates in 2022. Wang says that her course of study is giving her a broader perspective on all those related disciplines. “I believe pursuing an economics degree has allowed me to consider the world from various points of view and see the bigger picture. For instance, not only am I able to understand a competitive market or decisions that a firm makes based on economic theory, but I am also able to better understand how these factors affect my behavior as a consumer,” she says.
Below is a glimpse at a few jobs for economics majors who want to do something other than just be economists. For more career ideas and resources, visit the Wharton School or the American Economic Association.
This field is growing in popularity so fast that it has earned the top spot on Glassdoor’s Best Jobs in America list for the past four years. The arrival of big data has created a need for people who know how to make sense of it. Data scientists collect, organize and analyze all that information, then translate it to others so it can be used to make sound business and policy decisions. The average salary is $117,000 a year, and the field is forecast to grow by 28% in the next few years.
“Data scientists need to be curious and result-oriented, with exceptional industry-specific knowledge and communication skills that allow them to explain highly technical results to their non-technical counterparts,” according to the University of California, Berkeley. Wharton marketing professor Peter Fader, an expert in data analysis, adds, “Too many people, because of the misnomer of data science, think that if I can just crunch those numbers, sort them and manage them, great things will happen. The big payoff in data management is in the extracting beyond the data – the forecasting and the analytics. It’s more than just data-management skills; it’s the analytical skills to frame up the right questions.” In addition to economics, Fader suggests that aspiring data scientists tackle probability and statistics.
“Students are sometimes surprised when we start the semester discussing how economies worked before money lending became widespread and before countries had central banks.” — Krista Schwarz
After getting some real-world experience, academia is an option for economists who are drawn to both research and teaching. Krista Schwarz is a Wharton assistant finance professor whose research focuses on empirical asset pricing. That means she works with actual market data to better understand the information contained in stock and bond prices. “These are concepts that you learn about in economics classes, and as a professor, I enjoy having the opportunity to relate them to the way the market functions in the real world,” she says.
Schwarz notes how the Great Recession prompted an overhaul of federal regulations that profoundly affected the banking sector. She modified her class instruction to reflect those historic changes so her students would have a deeper understanding of the worst financial crisis of their generation.
“Historical reference is key in order to put today’s market conventions into context,” Schwarz says. “Students are sometimes surprised when we start the semester discussing how economies worked before money lending became widespread and before countries had central banks to coordinate their systems. I think it’s critical to understand where we came from in order to appreciate where we are today. My aim is to get students excited about something that they might not have previously thought they could or would find interesting.”
Before Schwarz was a professor, she worked on the trading desk at the Federal Reserve Bank of New York, which is no ordinary bank. As Schwarz puts it, the Federal Reserve is the “bank of banks” for the United States, setting monetary policy in the form of interest rates. To do this, the institution maintains a massive portfolio of securities that needs to be managed.
Schwarz first worked on the foreign segment of the portfolio, then later on the domestic side. It was dynamic work with new challenges that required constant collaboration with others. On the foreign side, Schwarz participated in occasional currency interventions, coordinated with several other central banks, aimed at affecting the value of the dollar against other currencies, particularly in times of extraordinary market stress such as the Sept. 11 terrorist attacks in the U.S. On the domestic side, she conducted daily fund auctions to banks that had submitted the rates they were willing to pay to borrow money. The goal was to keep the interest rates at which banks borrowed money from one another stable, by allowing banks to borrow just enough money from the Federal Reserve to satisfy their operational needs each day.
For central bankers, understanding the markets and what moves them is an important part of the job. Schwarz and her colleagues held daily conference calls with policymakers in Washington, D.C., to share information.
“Markets are constantly innovating, and so there was always something new to figure out,” she says. “Explaining what drove movements in the prices of stocks, bonds, repo [repurchase agreements], currencies and other markets was ultimately what motivated me to make asset pricing research my full-time job.”
- U.S. Bureau of Labor Statistics
- Forbes: Career Advice for Economics Majors
- Glassdoor: Great Jobs for Economics Majors
Are you interested in studying economics? What career do you plan to pursue?
Why is data analytics a top field for someone studying economics?
What is monetary policy and how does it impact our lives? Check out the Related KWHS Stories tab for help.
I am interested in economics because this field is full of possibility, potential, and flexibility. I believe economics can be one of the best ways to achieve success since it involves various sets of skills from different fields, such as data analyzing. For example, the three possibilities mentioned in the article seem to be unrelated at all. It is hard to find the similarities between a data scientist, a professor, and a central banker but these are all feasible choices for people who have a economics degree.
Data science is not only about managing data but also the analysis of information. The results of the analysis can be considered when politicians and businessmen are making decisions. Also, according to the research in the article, the prospect of data science is very optimistic.
Monetary policy is to use government’s control of money to influence economy and set interest rate. When the interest rate is low, companies will borrow money to invest new products and individuals will borrow money to buy cars and houses.
I was in my AP Microeconomics class and we were discussing a chapter in the AP Krugman’s textbook about inflation, something that many people would regard as one of the fundamental concepts in econ. I thought it was pretty simple, but my teacher worked at one of the world’s top banks–Morgan Stanley CI and so I thought he may provide me with some insight…. Something that I hadn’t already known yet.
That being said, I raised my hand and asked him, why do economists talk of inflation so often and added at the end, isn’t it when prices just go up? I thought I already knew everything and so I was curious to know something that I hadn’t.
The manner in which he next responded to me impounded the depth and importance of such a simple concept. He asked me if I knew about world war II and how it happened. Arrogantly, I thought “well yeah, Hitler rose to power and started everything right?”. Instead, I responded, “I guess” to which he asked me, do you know about the treaty of Versailles?
This reminded me of the summer school history class that I had taken in an attempt to get rid of an annoying “memorize and get graded” course–history. However, it turns out that I couldn’t been further from the truth. During class, we talked about the treaty of Versailles which is the reason why Germany went into great debt and hyperinflation, causing the rise of nazism.
“As economists, we study that effects of inflation on society. In the case of Germany in post WWI, this was a classical example of hyperinflation that ruined the economy and nearly destroyed society.”
He went on to explain that it was because of the allies that had imposed such harsh consequences on Germany (treaty of Versailles) that led to the rise of the Third Reich (Nazi/fascism) and that everything ties down to money. Also, since the United States had loaned a bunch of money to Germany in an attempt to help re-establish their economy, during the great depression, the US demanded a load of money back in order to alleviate the burden of their own debts, hence devaluing the German currency by a ton. As I do the research right now, one USD equalled 4,200 billion German marks in 1923 and people were apparently using the currency as toilet paper since TOILET PAPER itself was worth more than the currency. Had the allies (more or less the US) been more cautious of their decisions and studied economics, we wouldn’t have gone through WWII, lost over 70 million people and risked the world takeover of fascism.
Looking at the naive way that I acted at that time makes me think of the sophistication and complexity in the field of economics and how important it is to be an educated citizen in order to help ourselves and others make better decisions in life.
Economists now are aware that if a country suddenly prints a bunch of money to pay off their debt, that leads to hyperinflation, but at that time, people didn’t know it yet.
Although, many economists are theorists, and we very frequently disagree, understanding the social science of production, distribution and consumption is one of the crucial skills that people who have the power to make a difference at least have a basic knowledge have.
Data analysts, professors, bankers, policy makers all have the fiduciary responsibility of preserve, protect and defending the capitalistic society in which the American society was built upon and prevent it from falling apart.
And, throughout this example, I was inspired to read, learn and potentially pursue a degree in economics in college.
Thank you so much for your thought-provoking response! I really enjoyed reading through your profound understanding of hyperinflation during WWII and how it sabotaged the German economy after the war.
I thoroughly agree with your and your professor’s viewpoints on the treaty of Versailles. When the treaty was forged, the Allied Powers, who fought against Germany, believed the result of the treaty was a fair punishment for Germany, as they were the leading country of the Central Powers that caused millions of casualties and tremendous economic damage during World War I. Specifically, the Big Four, including the U.S., Italy, Britain, and France, who led the negotiation, wanted reparations for damages, so they used the treaty of Versailles as a means to gain short-term economic and territorial profit. However, being blinded by the pro et contra, economic advisors of these countries failed to foresee the future disaster that could arise from exploiting the German economy and its people. Nowadays, everyone knows that the nation’s economic status and its social stability are interconnected. However, being ignorant of this basic economic theory, the Big Four failed to recognize the potential adverse side effects of the treaty of Versailles and laid the perfect groundwork for radical fascist beliefs to gain popularity in Germany, providing a path for Adolf Hitler and the Nazi Party to take over the country. In the following years after World War I, the German people did not have a sustainable government to trust, their country was greatly in debt, and they felt like the entire world was unjustly suppressing them.
Based on how you have analyzed the Treaty of Versailles and its economic implication, now I understand how the treaty and its economic fallacy enabled radical beliefs and leaders to gain popularity. I fully agree with you on your opinion about data analysts, professors, bankers, and policymakers defending capitalism, democracy, and liberalism to prevent tragic events like the previous two World Wars from happening again. I am now even more inspired by the theories in economics and, precisely, how a country’s social stability dramatically depends on implementing the right economic policies.
In my World History class last year, I wrote about the devastating impacts of the Korean War on its society for my final research paper. Your comment about meticulously analyzing how economics is related to understanding different social phenomena inspired me to read my paper again, analyzing the Korean War in the eyes of an economist by paying more attention to the changes in the South Korean economy after the Korean War. While most people think that it was the war itself that tore down South Korea’s economy, there were also critical mistakes from the Korean government similar to that of the German government during WWII that led to hyperinflation in Korea, ultimately causing tremendous economic downfall. Specifically, the South Korean government decided to implement a monetary policy of pumping money into the economy to compensate for the economic losses, which has only exacerbated the nation’s hyperinflation. Several months after the war, the total distribution of money had tremendously increased, causing an imbalance between the inadequate tax surge and the immense demand for war expenses. Furthermore, due to the Daegu Agreement (a compromise of U.N. expenses), South Korea had to supply loans to the U.N. troops, which also aggravated the hyperinflation in its economy.
After reading your comment, I have discovered a close interrelationship between a country’s government and its economy. While many people assume that an economy mainly depends upon consumers, suppliers, and their exchanges of goods and services, the government also plays a pivotal role. During World War II, Germany went into tremendous debt due to the treaty of Versailles, which caused hyperinflation in its economy, ultimately leading to immense fiscal loss. Similarly, after the Korean War, the South Korean government’s financial policy to revamp its economy actually worsened the preexisting hyperinflation and almost decimated the economy. Realizing the importance of how the government’s fiscal and monetary policy can significantly influence the country’s economy, I wonder how the European Central Bank’s recent decision to increase its interest rate by 0.5% will affect European countries with credit risks such as Greece and Italy.
My father once said “You get a Physics degree and go into research. You get a History degree and become a Historian. But, you get an Economics degree and you become a leader.”
I believe this statement truly captures the versatility and relevance of an Economics degree in today’s day and age!
When Janet Yellen mentioned the fact that she had always loved math, I felt myself relating a lot to her. Growing up, math came very easily to me, so naturally, it was my favorite subject. I liked answering the problems because unlike other classes, there is always a clear solution and right ways to reach the answer. Now in high school, all the math courses I have taken have helped foster my interest even more, but while math remains one of my favorite subjects, I have become drawn to the ways it is applied to solve real-world problems like those facing our economy and businesses. From my parents’ business where I have helped with customer service and marketing since a young age, to the job-creating abilities of small businesses and the concerns of the recent COVID-induced crisis, I have realized that knowledge of economics is key not just for a future career, but for just understanding the events going on around me. When reading through the three different jobs described in the article, I was attracted to the idea of being a data scientist. I took a research literature class in freshman year where we mostly gathered and analyzed data from experiments and sometimes conducted experiments of our own. I remember enjoying the class because I liked figuring out why things happened. It’s one thing to conduct an experiment, but it’s another to produce results that help explain why something occurred. It’s really interesting for me to piece things together and come up with an explanation for things. Perhaps one day, I will use these skills, as the article suggests, to become an economist, working in the burgeoning field of data science to predict why my parents’ store’s sales slump and understand how the events in our economy unfold.