College students often do not think far ahead about the ramifications of their choice of major. But the reality is that what you study in college really does matter. And a new study, published in American Economic Journal: Applied Economics,puts this in very stark terms: Economics majors make a lot more money.
Study money, make money
The authors, Zachary Bleemer and Aashish Mehta, reviewed data on graduates from the University of California-Santa Cruz (UCSC) who took introductory economics courses at some point during their studies. Some of these students went on to major in economics, while others did not. Importantly, UCSC requires that students earn a GPA of at least 2.8 to be allowed to declare economics as their major.
By examining historical data on students enrolled between 2000 and 2014 and comparing it with employment records (for those who remained in the state of California after graduation), the researchers were able to determine the financial benefit of majoring in economics.
As shown in the above graph, known as a regression discontinuity (because of the “discontinuous” nature of the data above and below the GPA of 2.8), a sizable jump in salary occurs as a student’s GPA crosses the threshold of 2.8: roughly $8,000.
Crunching the numbers further, the authors estimated that an economics degree, for those who just barely satisfied the GPA requirement, boosted average salary from $37,000 to $59,000 — a difference of $22,000. The results were similar for men ($21,700) and women ($22,600). All of this is in line with data for the entire U.S. in 2018, in which workers aged 40 who held a degree in economics earned a median salary of $90,000, while their peers who studied other social sciences made $65,000. (By comparison, any non-economics major earned a median salary of $66,000.)
The economics gap
The difference in income is large enough that it is roughly similar to the earnings gap between those who go to college and those who do not. So, what explains the gap? About half of it is job related: Economics majors tend to have careers in business, finance, and real estate. Jobs in these professions often pay higher wages. But this effect also is tied to location. Economics majors get an early-career salary boost in California, but this is not true in many other states.
In 2014, then-President Obama remarked that students can make more money if they avoided majoring in something like art history, a comment for which he was widely criticized. He also happened to be correct.
You can expect a very high salary with an economics degree and some experience. For example, Salary.com reported an $87,390 average salary rate for corporate economist I job roles in 2021.
2. Economics / Finance. It's probably no surprise to hear that studying Economics or finance can help to fast track you towards being a millionaire. But it's not quite as easy as simply studying how to make your fortune, with economics in particular often seen as more theoretical and behind the scenes.
There is strong demand for graduates with knowledge of economics throughout the global labor market. Additionally, economics is a widely transferable analytical and problem-solving skillset that economics students can find careers that use their degree in extremely wide-ranging and diverse.
Yes, economists typically make a lot of money. While there is a wide range of roles with different salary levels, most economists make at least $100,000 in a year.
An economics degree from a top-ranked school can be a valuable asset for anyone pursuing a career in economics, finance, consulting, public policy, or academia. The quality of education and research opportunities at these top schools can help students gain a competitive edge and excel in their field.
In broader terms, the finance and investment profession has the most millionaires. It also has the most billionaires, with 371. Here's a list of the seven best careers if you want to be a millionaire.
The financial service industry has created the most millionaires in modern times. The financial system manages the money of people worldwide. Behind the most successful ventures in the world are people developing and growing money.
A finance degree might be more suitable if you are interested in managing investments, financial planning, or business finance. An economics degree might be more appropriate if you are engaged in economic research, policy analysis, or public service. Ultimately, the decision is yours.
It's about how people think and act, what makes them make the decisions they do, and so on. So why do people consider economics a difficult major? In this area, you will take a lot of math and statistics classes and do plenty of critical thinking and synthesizing of data – so it can definitely be hard!
With an advanced econ degree, economists can find jobs anywhere. That's why economics is one of the most popular majors. With their focus on critical thinking and their eye towards the bottom line, economics students are like the business world's English majors.
An economics degree from a top-ranked school can be a valuable asset for anyone pursuing a career in economics, finance, consulting, public policy, or academia. The quality of education and research opportunities at these top schools can help students gain a competitive edge and excel in their field.
A bachelor's degree in economics prepares graduates to enter the job market with desirable critical thinking and analytical skills. Because the field includes a diverse course of study, economics graduates can seek a career in a variety of areas, including business, finance, and banking.
Both economics and finance degrees are great for getting a high-paying job. The National Association of Colleges and Employers (NACE) reported an average starting salary of $55,965 for economics majors. Finance students weren't far beyond with a $55,609 mean wage.
Introduction: My name is Van Hayes, I am a thankful, friendly, smiling, calm, powerful, fine, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.
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