Help Wanted: Businesses Seek Applicants with Economics Degrees
by T. Cook, Copyright The Margin, Spring 1994
Perhaps the most frequently asked question from economics students is "What can I do with a bachelor's degree in economics?" Most find it easy to understand the employment advantages of a business diploma, but not necessarily an economics degree. Many conclude that government service or graduate schools are the only options, but economics graduates are found throughout the private sector.
Twenty to twenty-five thousand people graduate with undergraduate economics degrees every year. To put this in perspective, about four times as many people graduate with other social science degrees and nearly ten fold the number of business degrees are awarded annually.
Quite often students genuinely interested in economics decide instead to major in business. There are many reasons business degrees are a popular choice, but perhaps the most important involves labor market screening. Employers incur costs while searching for qualified applicants, and, often it is easier to screen applicants by easily understood attributes. Job holders with business degrees have enjoyed a good reputation as productive workers, therefore cost conscious firms tend to hire them first. Students have recognized that their chances of being hired improve with a degree in business.
Certainly it is wise to be careful about selecting a college major because not all graduates have been able to rely on the growth of the economy, job upgrades or retirements that might otherwise allow for a smooth transition into the labor force. The Bureau of Labor Statistics reports that approximately 20% of college graduates are underemployed or unemployed compared to about 10% to 15% in the 1970's. It appears that returns to investment in human capital are often low and students should hedge by selecting an attractive major.
Though a business degree is helpful in starting a career, the economics degree provides excellent qualifications. However, most bachelor degree holders do not work as professional economists and only about 15% work in a field closely related to the discipline of economics. Yet, labor market studies have shown that the majority of economics graduates find interesting jobs in business. For example, economist Daniel Heckler of the Bureau of Labor Statistics sampled 1986 economics graduates and discovered that after just one year 62% of those who found jobs were working at a level requiring a college degree. At first blush the figure might seem low, but the total was only 54% for business majors (not including accountants).
Interesting Jobs
Economics graduates are well prepared for many business occupations. The major provides a thorough grounding in complex and interdependent outcomes that affect business firms. Students are taught to think analytically and develop models appropriate to understanding structural change and the consequences of decision making. This is especially important in forecasting, planning and evaluation of business opportunities. In addition, quantitative analysis and problem solving are integrated into the economics curriculum, thus providing students useful skills.
There are many business positions available to economics college graduates. Shown is a table listing some occupations where recent graduates are employed. The job titles were compiled from several career planning references supplemented by this author's personal knowledge. Brevity does not allow an explanation of each job, but let's examine five.
Database administrator - Economic graduates who have taken several courses in computers and statistics are often competent to work with information management teams maintaining marketing databases. Both external and internal data are kept to monitor industry and firm activities and reports are prepared to help executives make critical business decisions.
Financial analyst - Business firms must prepare both short and long term budgets that require projections based upon market characteristics and business strategy. Economics graduates are well prepared to develop financial forecasting models of revenues, variable and fixed costs. On the job, the new employee will learn accounting principles specific to the business or industry.
Public Relations Representative - Economics graduates who study business behavior and public policy can help large businesses that are often in the public eye. Questions arise about the firm in the industry concerning new product markets, hiring of labor and government regulation. The public relations representative works to improve the firm's image as an entity in the economy.
Real Estate Appraiser - Since price theory is an important part of the economics curriculum, economics graduates are qualified to seek a career in real estate appraising. Special courses in real estate economics, regional economics and real estate evaluation methods enhance the student's abilities. The real estate appraiser works with lending institutions to evaluate both residential and commercial properties.
Sales Analyst - Effective sales programs are critical to business survival. Sales territory management, sales quota requirements, competitive sales tactics, sales prospect generation and sales reporting are some of the essential job requirements. A sales analyst should have knowledge of markets and good communication skills. A degree in economics, with its training in market structure, is excellent preparation for this type of work.
Changing World of Work
Though there are many business occupations where graduates are immediately employable, long term prospects are important, too. Economics is a discipline that trains students to think in a unique way. Less emphasis is placed upon being technically proficient in business methods, but the undergraduate major stresses breadth of knowledge and economic reasoning. As technical methods of operating a business shift, employees must recognize change and be able to adapt to it.
The world of work promises to change faster than what we have seen over the last decade. Product development and life cycles are becoming very short. Competitive business firms are increasingly attempting to make technological improvements and meet changing consumer preferences. Downsizing and elimination of many entry level and middle management jobs began in the 1980s and is anticipated to continue. Core business employees are expected to learn new jobs in marketing, operations, finance and a host of other areas as demand dictates.
The capabilities obtained via an economics education look very attractive for future work. The scope of economic knowledge, flexible work skills and ability to learn new ideas fit well with organizations that are set-up to adapt to customer driven changes. With increased emphasis on profits, firms will intensively focus on the optimal hiring rule and retain only those people who prove to have a marginal revenue product not less than the market equilibrium wage. However, some employers may be willing to pay an 'efficiency wage' higher than equilibrium in order to attract excellent personnel, reduce employee turnover and the cost of searching for workers.
Economist Robert Reich, Secretary of the Department of Labor, in his article "The Future of Work" states, "The intellectual equipment needed for the job of the future is an ability to define problems, quickly assimilate relevant data, conceptualize and reorganize the information, make deductive and inductive leaps with it, ask hard questions about it, discuss findings with colleagues, work collaboratively to find solutions, and then convince others." These are some of the very skills undergraduate students of economics learn while studying micro, macro, quantitative and specialized field courses.
Advice for Graduates
Finding a first job after college is often arduous. Labor markets conditions vary, and present a practical test of the knowledge and abilities of those with bachelor's degrees in economics. When looking for work, there will seem to be two job markets. The first is the public market where jobs are openly advertised. However, logic tells us that these positions are advertised because firms find it difficult to attract qualified applicants. A few good jobs will be found this way.
Career counselors believe more better jobs are found in what they call the hidden market. These positions, available to economics graduates, are unadvertised. However, employers have many unsolicited resumes to select from and use the screening process described earlier in this article. Candidates with good jobs search skills are the ones who land these jobs. Again, economics graduates have excellent preparation for the task. Part of economics training involves researching industries and business firms.
Finding the right job with the right company is not easy. In many cases, an economics graduate will be underemployed while waiting for a college level job. However, joining a company allows the graduate to participate in the internal labor market of the firm and be in an excellent position to launch a successful career predicated upon a bachelor's degree in economics.
A Sample of Job Titles Held by Economics Graduates
Appraiser
Auditor
Broker
Floor Representative
Budget Analyst
Buyer
Claim Examiner
Compensation Analyst
Credit Analyst
Database Administrator
Economic Analyst
Efficiency Expert
Employment Interviewer
Environmental Planner
Financial Analyst
Forecasting Administrator
Fund Raiser Import/Export Agent
Insurance Agent
Job Analyst
Loan Officer
Loan Review Analyst
Lobbyist
Management Analyst
Management Consultant
Market Planner
Market Research Analyst
Marketing Administrator
Operations Research Analyst
Pricing Analyst
Product Manager
Public Relations Representative
Purchasing Analyst
Quality Assurance Analyst
Real Estate Appraiser
Reporter
Reports Analyst
Research Analyst
Sales Analyst
Sales Representative
Securities Broker
Strategic Planning Analyst
Speech Writer
Statistician
Systems Analyst
Traffic Analyst
Underwriter
by T. Cook, Copyright The Margin, Spring 1994
Perhaps the most frequently asked question from economics students is "What can I do with a bachelor's degree in economics?" Most find it easy to understand the employment advantages of a business diploma, but not necessarily an economics degree. Many conclude that government service or graduate schools are the only options, but economics graduates are found throughout the private sector.
Twenty to twenty-five thousand people graduate with undergraduate economics degrees every year. To put this in perspective, about four times as many people graduate with other social science degrees and nearly ten fold the number of business degrees are awarded annually.
Quite often students genuinely interested in economics decide instead to major in business. There are many reasons business degrees are a popular choice, but perhaps the most important involves labor market screening. Employers incur costs while searching for qualified applicants, and, often it is easier to screen applicants by easily understood attributes. Job holders with business degrees have enjoyed a good reputation as productive workers, therefore cost conscious firms tend to hire them first. Students have recognized that their chances of being hired improve with a degree in business.
Certainly it is wise to be careful about selecting a college major because not all graduates have been able to rely on the growth of the economy, job upgrades or retirements that might otherwise allow for a smooth transition into the labor force. The Bureau of Labor Statistics reports that approximately 20% of college graduates are underemployed or unemployed compared to about 10% to 15% in the 1970's. It appears that returns to investment in human capital are often low and students should hedge by selecting an attractive major.
Though a business degree is helpful in starting a career, the economics degree provides excellent qualifications. However, most bachelor degree holders do not work as professional economists and only about 15% work in a field closely related to the discipline of economics. Yet, labor market studies have shown that the majority of economics graduates find interesting jobs in business. For example, economist Daniel Heckler of the Bureau of Labor Statistics sampled 1986 economics graduates and discovered that after just one year 62% of those who found jobs were working at a level requiring a college degree. At first blush the figure might seem low, but the total was only 54% for business majors (not including accountants).
Interesting Jobs
Economics graduates are well prepared for many business occupations. The major provides a thorough grounding in complex and interdependent outcomes that affect business firms. Students are taught to think analytically and develop models appropriate to understanding structural change and the consequences of decision making. This is especially important in forecasting, planning and evaluation of business opportunities. In addition, quantitative analysis and problem solving are integrated into the economics curriculum, thus providing students useful skills.
There are many business positions available to economics college graduates. Shown is a table listing some occupations where recent graduates are employed. The job titles were compiled from several career planning references supplemented by this author's personal knowledge. Brevity does not allow an explanation of each job, but let's examine five.
Database administrator - Economic graduates who have taken several courses in computers and statistics are often competent to work with information management teams maintaining marketing databases. Both external and internal data are kept to monitor industry and firm activities and reports are prepared to help executives make critical business decisions.
Financial analyst - Business firms must prepare both short and long term budgets that require projections based upon market characteristics and business strategy. Economics graduates are well prepared to develop financial forecasting models of revenues, variable and fixed costs. On the job, the new employee will learn accounting principles specific to the business or industry.
Public Relations Representative - Economics graduates who study business behavior and public policy can help large businesses that are often in the public eye. Questions arise about the firm in the industry concerning new product markets, hiring of labor and government regulation. The public relations representative works to improve the firm's image as an entity in the economy.
Real Estate Appraiser - Since price theory is an important part of the economics curriculum, economics graduates are qualified to seek a career in real estate appraising. Special courses in real estate economics, regional economics and real estate evaluation methods enhance the student's abilities. The real estate appraiser works with lending institutions to evaluate both residential and commercial properties.
Sales Analyst - Effective sales programs are critical to business survival. Sales territory management, sales quota requirements, competitive sales tactics, sales prospect generation and sales reporting are some of the essential job requirements. A sales analyst should have knowledge of markets and good communication skills. A degree in economics, with its training in market structure, is excellent preparation for this type of work.
Changing World of Work
Though there are many business occupations where graduates are immediately employable, long term prospects are important, too. Economics is a discipline that trains students to think in a unique way. Less emphasis is placed upon being technically proficient in business methods, but the undergraduate major stresses breadth of knowledge and economic reasoning. As technical methods of operating a business shift, employees must recognize change and be able to adapt to it.
The world of work promises to change faster than what we have seen over the last decade. Product development and life cycles are becoming very short. Competitive business firms are increasingly attempting to make technological improvements and meet changing consumer preferences. Downsizing and elimination of many entry level and middle management jobs began in the 1980s and is anticipated to continue. Core business employees are expected to learn new jobs in marketing, operations, finance and a host of other areas as demand dictates.
The capabilities obtained via an economics education look very attractive for future work. The scope of economic knowledge, flexible work skills and ability to learn new ideas fit well with organizations that are set-up to adapt to customer driven changes. With increased emphasis on profits, firms will intensively focus on the optimal hiring rule and retain only those people who prove to have a marginal revenue product not less than the market equilibrium wage. However, some employers may be willing to pay an 'efficiency wage' higher than equilibrium in order to attract excellent personnel, reduce employee turnover and the cost of searching for workers.
Economist Robert Reich, Secretary of the Department of Labor, in his article "The Future of Work" states, "The intellectual equipment needed for the job of the future is an ability to define problems, quickly assimilate relevant data, conceptualize and reorganize the information, make deductive and inductive leaps with it, ask hard questions about it, discuss findings with colleagues, work collaboratively to find solutions, and then convince others." These are some of the very skills undergraduate students of economics learn while studying micro, macro, quantitative and specialized field courses.
Advice for Graduates
Finding a first job after college is often arduous. Labor markets conditions vary, and present a practical test of the knowledge and abilities of those with bachelor's degrees in economics. When looking for work, there will seem to be two job markets. The first is the public market where jobs are openly advertised. However, logic tells us that these positions are advertised because firms find it difficult to attract qualified applicants. A few good jobs will be found this way.
Career counselors believe more better jobs are found in what they call the hidden market. These positions, available to economics graduates, are unadvertised. However, employers have many unsolicited resumes to select from and use the screening process described earlier in this article. Candidates with good jobs search skills are the ones who land these jobs. Again, economics graduates have excellent preparation for the task. Part of economics training involves researching industries and business firms.
Finding the right job with the right company is not easy. In many cases, an economics graduate will be underemployed while waiting for a college level job. However, joining a company allows the graduate to participate in the internal labor market of the firm and be in an excellent position to launch a successful career predicated upon a bachelor's degree in economics.
A Sample of Job Titles Held by Economics Graduates
Appraiser
Auditor
Broker
Floor Representative
Budget Analyst
Buyer
Claim Examiner
Compensation Analyst
Credit Analyst
Database Administrator
Economic Analyst
Efficiency Expert
Employment Interviewer
Environmental Planner
Financial Analyst
Forecasting Administrator
Fund Raiser Import/Export Agent
Insurance Agent
Job Analyst
Loan Officer
Loan Review Analyst
Lobbyist
Management Analyst
Management Consultant
Market Planner
Market Research Analyst
Marketing Administrator
Operations Research Analyst
Pricing Analyst
Product Manager
Public Relations Representative
Purchasing Analyst
Quality Assurance Analyst
Real Estate Appraiser
Reporter
Reports Analyst
Research Analyst
Sales Analyst
Sales Representative
Securities Broker
Strategic Planning Analyst
Speech Writer
Statistician
Systems Analyst
Traffic Analyst
Underwriter
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