Today’s post focuses on students who want to major in economics and the career options available to them.
I feel there are some key considerations you should have before you decide to be an Economics major or want to do a specialization in Economics at graduate school.
Math is something you can’t escape
Even though economics is part of social sciences, it is the only course that requires a considerable amount of quantitative analysis. Thus, one of the prerequisites is that you must be good at math. College-level economics involves calculus in both Macroeconomics and Microeconomics. This is in addition to the required math courses you will have to complete in your four-year degree. Below I list the core courses which you will be taking at most universities:
- Macroeconomics 1 and 2 (focuses on a country’s inflation, GDP, Growth, unemployment, and policy-making – the macro or the big picture)
- Microeconomics 1 and 2 (focuses on the economics of an individual, a firm, and the government – the micro/smaller picture)
- Statistics (focuses on data analysis and its inferences)
- International trade (the advantages and disadvantages of it, country’s balance of payments, etc.)
- Econometrics with basic programming skills (focuses on how we can explain a certain phenomenon by a variety of other phenomena using data and regression analysis. Also great for predictions and forecasting)
- Mathematics for economics 1 and 2 (Economics theories explained through mathematical models)
- Money and financial systems (Banking and monetary system of a country)
These are some of the required core courses that you will have to take in addition to many electives such as development economics, public economics, labor economics, environmental economics, behavioral economics, financial economics, and other such courses. Please note that the electives I listed are not comprehensive and are just for an overview, as each University will have slightly different options.
Further, if you plan to do a Masters or Ph.D. in Economics, the level of math needed increases manifold. Thus, you must understand calculus well. There will be a lot of mathematical models you will be studying which explain how our economies work. A lot of these models would involve complex math functions and differential equations. For that, having a solid math background in high school is a must.
What are the career options for economics majors?
Economics teaches critical and analytical thinking, so there is a wide variety of career options available to economics majors. Someone with a bachelor’s degree in economics can work at entry-level in the following industries:
- Consulting
- Banking
- Investment banks
- Actuary and insurance sector
- Teaching at a high school (requires a teaching credential or a master’s degree)
- Economic research firms
- Other firms requiring research and data analysis
- Not-for-profit organization
- The finance department of the government
- Bureau of Labor Statistics (BLS) or equivalent in your country
- US treasury or equivalent in your country
- Fed or central bank in your country
- World bank
- IMF
- United Nations
- Policy-making
- Economic think-tanks
However, the last eight usually require a graduate degree in economics. Most of these jobs will involve data analysis, so having some type of programming background will be very useful. Knowledge of SAS, STATA, or any other econometrics software will give you the edge at the interview.
My two cents on Economic Consulting as a career choice
From my experience working in economic and financial litigation consulting previously, I noticed that people with good quantitative analysis and presentation skills had a higher chance of moving up the corporate ladder. Intermediate advanced MS excel skill and knowledge of statistical software such as SAS was critical for the work I did in my company.
Finance and accounting knowledge will be essential to work in financial consulting, commercial banks, stock exchanges, and investment banks. So my advice is to take a few basic accounting and corporate finance courses in college if you are considering these options.
Most economics entry-level jobs start with a salary of $70-$85K per year. The amount of income that economics majors make is above many other majors.
As a career choice, it is very financially rewarding with a huge potential for monetary and intellectual growth.
I can explain the nature of the litigation consulting industry better as I had worked there. Most people with an undergrad degree in economics start with an analyst position and move up a level or two gradually with experience.
However, after a certain level, most consulting firms and investment banks require a Master’s degree/MBA or Ph.D. in economics or related fields such as finance, accounting, or Law.
So typically economics majors work for 3-4 years as entry-level analysts and then apply for graduate school.
What do most economics majors do for grad school?
There are many possibilities for economics majors but most of them chose one of the following fields.
- Masters in economics
- Masters in public policy
- MBA
- Ph.D. in Economics
- Graduate Law degree
Job options for people with a graduate degree in economics.
One of the most widely available job titles for people with a graduate degree in economics is an Economist. These professionals analyze economies and how to optimize an area’s resources for its production, output, and material wealth. They collect and analyze data, research trends, and evaluate economic issues for the resources, goods, and services.
As of September 8, 2022, BLS lists the median salary for an economist as around $106K per year.
This article from the American economic association also supports what I have mentioned in my post based on my observation.
Job options after a Master’s degree or more always start at the managerial level. The industries or fields are essentially the same, except you start at the mid to upper level. Investment banks, commercial banks, consulting, and economic research firms are always looking to hire economists.
People with Ph.D. in economics also go towards the academia and research side, with many teaching Economics at the University level.
Here is another article listing various career options for economics majors and their respective salaries.
Also, having an economics degree can help individuals start their businesses as they can do a cost-benefit analysis of their resources.
Last but not the least, you can always write an economics blog as a side hustle and perhaps make it your full-time job like me, if you are passionate about the course. Since I didn’t teach economics at a college, I am fulfilling my long-term desire through this blog. 😊
What are the challenges of careers in economics?
As most economics majors end up working as an analyst in consulting firms and investment banks, they have a hard time maintaining a work-life balance. Both of these industries require an immense amount of time commitment as they focus on client needs. I remember working all night several times. For me, managing my family in that very demanding job with no support at home was quite challenging.
Again, I am only aware of consulting and investment banking, as these are two industries I had experience working in. I also worked directly in conjunction with financial lawyers, so I am aware of how demanding the work schedule could be.
On average people who work in consulting and investment banking work 60 hours a week. There is also a considerable number of late-night and weekend work. Some of these jobs also require frequent travel, so just be aware of that when you consider applying for these positions.
Conclusion
It all depends on what is more important to you and the stage of life you are in. An economics degree, if you are working in the corporate side or with the government can be a great choice for reaching your financial goals. Also, you get to work on a wide variety of cases, so it satisfies and enriches your intellectual curiosity.
People who teach economics at colleges or universities publish papers in addition to teaching classes. So, if this is something you will enjoy in the future, a graduate degree in economics is a great choice.
