Careers in Economics
CAREERS IN ECONOMICS
Economists study how society uses, regulates, and distributes its natural and human-made resources such as land, labor, raw materials, and machinery to produce goods and services (Horizons, 2000). In simpler terms, they study how effectively society meets its human and material needs. Economists also study how economic systems address three basic questions: What shall we produce?; How shall we produce it?; For whom shall we produce it? They then compile, process, and interpret the answers to these questions (Economists, 2005). Economists may analyze the relationship between supply and demand and develop theories and models to help predict these future relationships. They help provide a logical, ordered way of looking at various problems. They attempt to explain social concerns such as unemployment, inflation, economic growth, business cycles, tax policy, or farm prices. Most economists apply their skills to solve problems in specific areas, such as transportation, labor, heath, finance, marketing, corporate planning, energy, or agriculture. Business firms, banks, insurance companies, labor unions, governmental agencies, and others seek advice from economists to use in their decision making.
TYPES OF ECONOMISTS
Theoretical economists, employing mathematical models, develop theories to examine major economic phenomena, such as the causes of business cycles or inflation or the effects of unemployment, energy prices, or tax laws. Most economists, however, concern themselves with the practical application of economic policy to such areas as finance, labor, agriculture, health, and transportation (Harkavy, 1999). Although there is a wide range of careers open to economists, there are three main career paths: business, government, and academia. Each type of economist applies the economic approach to decision-making in a different setting.
Business economists work in such areas as manufacturing, mining, transportation, communications, banking, insurance, retailing, private industry, securities and investment firms, management consulting firms, and economic and market research firms, as well as trade associations and consulting organizations (Careers, 2001). Many private firms, both large and small, recruit undergraduate economics majors for jobs. These jobs are general-purpose ones for which employers seek bright, highly-motivated students who can learn a specific business through on-the job training. To become a professional business economist requires graduate training. Business economists perform such tasks as forecasting the business environment, interpreting the impact of public/governmental policy on the firm, and collecting and processing data. They also supply information to management that affects decisions on the marketing and pricing of company products, as well as providing long- and short-term economic forecasts ("Economics," 1997). For example, a business firm's managers might ask its marketing analysts to provide specific information on which to base marketing and pricing policies. Using econometric modeling techniques, the analysts develop projections of market reactions to various price levels throughout the industry. On the basis of these projections, the mangers can make informed pricing decisions. Informed, rational decision making on economic matters is what economics is all about.
Government economists work for federal, state, and local governments in a wide variety of positions involving analysis and policy making. The federal government is a major source of employment for economists with an undergraduate degree; information about job openings in various agencies is available from the Federal Employment Information Center. A bachelor's degree in economics is a good qualification for an entry-level position; a person can advance to higher positions by obtaining a graduate degree or by promotion from within. There are jobs for labor, international, development, and population economists, as well as micro- and macroeconomists (Careers, 2001). Economists who work for government or private research agencies assess economic trends in order to formulate policy in such areas as agriculture, forestry, business, finance, labor, transportation, urban economics, or international trade and development (Horizons, 2000). Working for Congress is a relatively new area for economists. Legislation and the issues facing Congress are becoming more complex and economic in nature, and as a result, members of Congress are turning to economists for advice on these issues.
Academics is another major area in which economists are found. Economics professors teach basic macro- and microeconomics courses (the "big picture" versus individual companies/persons) as well as courses on advanced topics, such as economic history and labor economics. They also do research, write papers and books, and give lectures, contributing their knowledge to the advancement of the discipline (Economists, 2005). In order to teach at a four-year college, it is essential to have a Ph.D. in economics. Faculty members usually divide their time among teaching, research, and administrative responsibilities. Many academic economists also have the opportunity to consult either for business or government.
|Career opportunities for which an economics background is well suited|
RELATED USES FOR AN ECONOMICS DEGREE
Economics is widely recognized as a solid background for many jobs and professions in business, government, and the law. Economics majors have a wide range of choices and a great deal of flexibility when deciding on a profession (see Table 1).
An undergraduate major in economics can be an ideal preparation for work on a Master of Business Administration degree, and many graduate business schools encourage students to take at least some economics courses. Studying economics is also excellent preparation for becoming a lawyer; many believe that economics is one of the best backgrounds for success in law school because of its emphasis on a logical approach to problems, logical reasoning, and analytical skills. Publishing companies and trade associations also employ economists. Newspapers provide economics majors with opportunities to write about economic and business events. The demand for economics teachers in secondary schools is growing as economics becomes an increasingly important and popular course (Careers, 2001).
Economists generally work in offices or classrooms. The average work week for government economists is forty hours, but the schedules of academic and business economists are less predictable. Regular travel may be necessary to collect data or attend conferences or meetings. International economists may spend as much as 30 percent of their time traveling and 40 percent of their time on the telephone or the Internet researching current trends in foreign economic systems (for this subgroup, language skills are important).
Economists in nonteaching positions often work alone writing reports, preparing statistical charts, and using computers, but they may also be part of a research team. Faculty economists have flexible work schedules, dividing their time among teaching, research, consulting, and administrative duties. High levels of satisfaction are found throughout this field, which encourages discussion, detailed examination, and lively disagreement.
DESIRABLE PERSONAL QUALITIES
The field of economics rewards creative, curious, analytical, and logical thinkers. Helpful qualities for an economist include the following:
- The ability to work accurately with details
- The ability to work well independently as well as with others
- The ability to be objective and systematic in one's work
- Patience and persistence (since economists and marketing research analysts must spend long hours on independent study and problem solving)
- Effective communication skills
- Intellectual curiosity
- The ability to collect, organize, interpret, and analyze data
- Leadership ability
- The ability to present findings clearly, both orally and in writing
- The ability to make decisions based on experience and using data
- Enjoyment of the research process
Especially for advancement purposes, it is helpful to continue pursuing education and to take graduate-level courses. It is also important to be able to work successfully under the pressure of deadlines and tight schedules and to be able to bear the responsibility of knowing that the information provided will affect the future policies of current employers.
EDUCATION AND TRAINING
People who are interested in this field should be able to work accurately and precisely, because economics entails careful analysis of data. Good communications skills are also necessary. One should also take as many mathematics and computer science courses as possible in high school (Economics, 2005).
A college major in economics is the basic preparation for a career in economics. Students should also study political science, psychology, sociology, finance, business law, international relations, statistics, regression analysis, and econometrics. Those who are comfortable with the written and spoken word have a significantly higher rate of advancement and overall job satisfaction than those who are not.
Although most professional economists hold a master's degree or a doctorate, a bachelor's degree often suffices for an entry-level position in business or government, perhaps in an economics-related area such as sales or marketing, beginning research, or administrative and management training (Economics, 2005). The primary responsibilities in entry-level positions are the collection, adaptation, and preparation of data. In the federal government, applicants for entry-level economist positions must have a bachelor's degree with a minimum of twenty-one semester hours of economics and three hours of statistics, accounting, or calculus. However, additional courses and/or superior academic performance are likely to be required. The importance of quantitative analysis makes it highly desirable for those planning a career in economics to take courses in mathematics, statistics, sampling theory and survey design, and computer science (Harkavy, 1999).
Postgraduate degrees in economics, with concentration in areas such as economic theory, econometrics, comparative economic systems, economic planning, labor economics, and international economics, are generally required for advancement in government or private industry (Harkavy, 1999). Business economists with a graduate degree and experience may advance to management or executive positions in banks, industry, or other organizations, where they determine business and administrative policy. A master's degree is usually the minimum requirement for a job as an instructor in junior and community colleges. For a faculty position in most colleges and universities, however, a Ph.D. is normally required. A Ph.D. plus extensive publications in academic journals are required for a professorship, tenure, and promotion. Economists in education may advance to be department heads or to administrative or research positions (Economists and Marketing, 2000).
Overall, good mathematical and analytical skills are essential; persistence, objectivity, and creativity in problem solving are important; and computer skills and excellent communication skills are invaluable. No special licensing or certification is required for economists (Harkavy, 1999).
LOCATION OF JOBS
Generally economists who are not in academia work in large cities, where there is the highest concentration of major financial and government power; New York City and Washington, DC, are main centers of employment, along with Chicago and Los Angeles. Academic positions are spread throughout the country. American economists are also employed in foreign countries by international companies and organizations and by U.S. government agencies (Economists, 2005).
EARNINGS AND PROSPECTIVE JOB OUTLOOK
Economists are the highest-paid social scientists. The highest-paid economists in business are in securities and investment, insurance, and retail and wholesale trade. The lowest-paid economists work in education, nonprofit research institutions, and real estate (Harkavy, 1999).
Job opportunities for economists should be best in manufacturing, financial services, advertising, and consulting firms. The complexity of modern national and international markets will continue to spur a demand for those skilled in quantitative analysis. In addition, lawyers, accountants, engineers, and urban and regional planners, among others, will continue to need economic analysis. The majority of openings will come about as the result of replacement needs for those retiring or leaving the profession for some other reason (Harkavy, 1999).
Demand for qualified marketing research analysts should be strong because of the increasingly competitive economy. Marketing research provides organizations with valuable feedback from purchasers that enables companies to evaluate consumer satisfaction and plan more effectively for the future. As companies seek to expand their market and consumers become better informed, the need for marketing professionals will increase (Economists and Marketing, 2000).
Economists with a bachelor's degree will face strong competition in securing jobs in business or industry; some may find positions as management or sales trainees or as research or administrative assistants. Those with master's degrees and a strong background in marketing and finance will have the best prospects in business, banking, advertising, and management consulting (Harkavy, 1999). Those holding doctoral degrees in economics and marketing are likely to face strong competition for teaching positions in colleges and universities. However, opportunities should be good in other areas, such as industry and consulting firms.
Economics is the only social science for which a Nobel Prize is awarded—an indication of its importance. Economic concepts have been applied in the natural sciences; both the theory of natural selection and the study of ecology, for example, have drawn extensively on economic concepts. Economics is both a theoretical and an applied discipline. It analyzes the way an economy can be changed and improved through learning how the various parts of society affect each other and studying the relationships between government, business, and the individual (Basta, 1991). Economic concepts are so powerful and versatile that they have been applied to attempts to understand nearly every aspect of human activity. Economics provides important insights in areas from government fiscal and monetary policy, to business, to law and property rights, to poverty and health issues, to environmental and natural resource issues, to the choice of marriage partners.
see also Economics
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