Nature of the Work
Economists study the ways a society uses scarce resources such as land, labor, raw materials, and machinery to produce goods and services. They analyze the costs and benefits of distributing and consuming these goods and services. Economists conduct research, collect and analyze data, monitor economic trends, and develop forecasts. Their research might focus on topics such as energy costs, inflation, interest rates, farm prices, rents, imports, or employment.
Most economists are concerned with practical applications of economic policy in a particular area, such as finance, labor, agriculture, transportation, real estate, environment, natural resources, energy, or health. They use their understanding of economic relationships to advise business firms, insurance companies, banks, securities firms, industry and trade associations, labor unions, government agencies, and others. On the other hand, economists who are primarily theoreticians may use mathematical models to develop theories on the causes of business cycles and inflation, or the effects of unemployment and tax legislation.
Depending on the topic under study, economists devise methods and procedures for obtaining the data they need. For example, sampling techniques may be used to conduct a survey, and econometric modeling techniques may be used to develop forecasts. Preparing reports usually is an important part of the economist's job. He or she may be called upon to review and analyze all the relevant data, prepare tables and charts, and write up the results in clear, concise language. Being able to present economic and statistical concepts in a meaningful way is particularly important for economists whose research is policy directed.
Economists who work for government agencies assess economic conditions in the United States and abroad and estimate the economic effects of specific changes in legislation or public policy. For example, they may study how the dollar's fluctuation against foreign currencies affects import and export markets. Most government economists are in the fields of agriculture, business, finance, labor, transportation, utilities, urban economics, or international trade. Economists in the U.S. Department of Commerce study domestic production, distribution, and consumption of commodities or services; those in the Federal Trade Commission prepare industry analyses to assist in enforcing Federal statutes designed to eliminate unfair, deceptive, or monopolistic practices in interstate commerce; and those in the Bureau of Labor Statistics analyze data on prices, wages, employment, productivity, and safety and health. An economist working for a state or local government might analyze regional or local data on trade and commerce, industrial and commercial growth, and employment and unemployment, and project labor force trends.
Economists working for government agencies and private firms have structured work schedules. They may work alone writing reports, preparing statistical charts, and using computers and calculators. Or they may be an integral part of a research team. Most work under pressure of deadlines and tight schedules, and sometimes must work overtime. Their routine may be interrupted by special requests for data, letters, meetings, or conferences. Travel may be necessary to collect data or attend conferences.
Economics faculty have flexible work schedules, and may divide their time among teaching, research, consulting, and administration.
Economists and marketing research analysts held about 51,000 jobs in 1992. Private industry particularly economic and marketing research firms, management consulting firms, banks, securities and commodities brokers, and computer and data processing companies employed 7 out of 10 salaried workers. The remainder, primarily economists, were employed by a wide range of government agencies, primarily in the Federal Government. The Departments of State, Labor, Agriculture, and Commerce are the largest Federal employers of economists. A number of economists combine a full-time job in government or business with part-time or consulting work in academia or another setting.
Employment of economists analysts is concentrated in large cities for example, New York City, Washington, D.C., and Chicago. Some economists work abroad for companies with major international operations; for the Department of State and other U.S. Government agencies; and for international organizations, including the World Bank and the United Nations.
Besides the jobs described above, many economists held economics faculty positions in colleges and universities.
Training, Other Qualifications, and Advancement
A bachelor's degree with a major in economics is sufficient for many entry-level research, administrative, management trainee, and sales jobs. Economics majors can choose from a variety of courses, ranging from those which are intensely mathematical like microeconomics, macroeconomics, and econometrics, to more philosophical courses like the history of economic thought. Because of the importance of quantitative skills to economists, courses in mathematics, statistics, econometrics, sampling theory and survey design, and computer science are highly recommended.
Aspiring economists can gain experience gathering and analyzing data, conducting interviews or surveys, and writing reports on their findings while in college. This experience can prove invaluable later in obtaining a full-time position in the field, since much of their work in the beginning centers around these duties. Beginning workers also may do considerable clerical work, such as copying data, editing and coding questions, and tabulating survey results. With further experience, economists eventually are assigned their own research projects.
Graduate training increasingly is required for many economist jobs, and for advancement to more responsible positions. Economics includes many specialties at the graduate level, such as advanced economic theory, mathematical economics, econometrics, history of economic thought, international economics, and labor economics. Students should select graduate schools strong in specialties in which they are interested. Some schools help graduate students find internships or part-time employment in government agencies, economic consulting firms, financial institutions, or marketing research firms. Like undergraduate students, work experience and contacts can be useful in testing career preferences and learning about the job market for economists.
In the Federal Government, candidates for beginning economist positions generally need a college degree with a minimum of 21 semester hours of economics and 3 hours of statistics, accounting, or calculus. Competition is keen, however, and additional education or experience may be required for some jobs.
For a job as a college instructor in many junior colleges and some 4-year schools, a master's degree is the minimum requirement. In most colleges and universities, however, a Ph.D. is necessary for appointment as an instructor. Similar to other disciplines, a Ph.D. and extensive publication are required for a professorship and for tenure.
In government, industry, research organizations, and consulting firms, economists who have a graduate degree usually can qualify for more responsible research and administrative positions. A Ph.D. is necessary for top positions in many organizations. Many corporation and government executives have a strong background in economics or marketing.
Persons considering careers as economists should be able to work accurately with detail since much time is spent on data analysis. Patience and persistence are necessary qualities since economists may spend long hours on independent study and problem solving. At the same time, they must be able to work well with others. Economists must be objective and systematic in their work and be able to present their findings, both orally and in writing, in a clear, meaningful way. Creativity and intellectual curiosity are essential for success in these fields, just as they are in other areas of scientific endeavor.
Employment of economists is expected to grow about as fast as the average for all occupations through the year 2005. Most job openings, however, are likely to result from the need to replace experienced workers who transfer to other occupations, or retire or leave the labor force for other reasons.
Opportunities for economists should be best in private industry and in research and consulting firms, as some companies contract out for economic research services rather than support a staff of full-time economists. The growing complexity of the global economy and increased reliance on quantitative methods of analyzing business trends, forecasting sales, and planning purchasing and production should spur demand for economists. The continued need for economic analyses by lawyers, accountants, engineers, health services administrators, education administrators, urban and regional planners, environmental scientists, and others also should result in additional jobs for economists. Other organizations, including trade associations, unions, and nonprofit organizations, may offer job opportunities for economists. Employment of economists in the Federal Government should decline in line with the rate of growth projected for the Federal workforce as a whole. Slower than average employment growth is expected among economists in State and local government.
A strong background in economic theory, mathematics, statistics, and econometrics provides the tools for acquiring any specialty within the field. Those skilled in quantitative techniques and their application to economic modeling and forecasting and marketing research, including the use of computers, should have the best job opportunities.
Persons who graduate with a bachelor's degree in economics through the year 2005 should face keen competition for the limited number of economist positions for which they qualify. Related work experience conducting research, developing surveys, or analyzing data, for example while in school is a major asset in this competitive job market. Many graduates will find employment in government, industry, and business as management or sales trainees, or as research or administrative assistants. Economists with good quantitative skills are qualified for research analyst positions in a broad range of fields. Those with strong backgrounds in mathematics, statistics, survey design, and computer science may be hired by private firms for marketing research work. Those who meet State certification requirements may become high school economics teachers. The demand for secondary school economics teachers is expected to grow as economics becomes an increasingly important and popular course.
Candidates who hold a master's degree in economics have better employment prospects than bachelor's degree holders. Some businesses and research and consulting firms seek master's degree holders who have strong computer and quantitative skills and can perform complex research, but do not command the high salary of a Ph.D. Master's degree holders are likely to face competition for teaching positions in colleges and universities; however, some may gain positions in junior and community colleges.
Opportunities will be best for Ph.D.'s. Ph.D. graduates should have opportunities to work as economists in private industry, research and consulting firms, and government. In addition, employment prospects for economists in colleges and universities should improve due to an expected wave of retirements among college faculty.
According to a 1993 salary survey by the College Placement Council, persons with a bachelor's degree in economics received offers averaging $25,200 a year.
The median base salary of business economists in 1992 was $65,000, according to a survey by the National Association of Business Economists. Ninety percent of the respondents held advanced degrees. The highest salaries were reported by those who had a Ph.D., with a median salary of $78,000. Master's degree holders earned a median salary of $58,000, while bachelor's degree holders earned $51,000. The highest paid business economists were in the nondurable manufacturing, securities and investment, mining, banking, and real estate industries. The lowest paid were in academia and government.
The Federal Government recognizes education and experience in certifying applicants for entry level positions. In general, the entrance salary for economists having a bachelor's degree averaged about $18,300 a year in 1993; however, those with superior academic records could begin at $22,700. Those having a master's degree could qualify for positions at an annual salary of $27,800. Those with a Ph.D. could begin at $33,600, while some individuals with experience and an advanced degree could start at $40,300.
Economists in the Federal Government in nonsupervisory, supervisory, and managerial positions averaged around $53,500 a year in 1993.
Like other college faculty, economists entering careers in higher education may receive benefits such as summer research money, computer access, money for student research assistants, and secretarial support.
Economists are concerned with understanding and interpreting financial matters, among other subjects. Others with jobs in this area include financial managers, financial analysts, accountants and auditors, underwriters, actuaries, securities and financial services sales workers, credit analysts, loan officers, and budget officers.
Sources of Additional Information
For information on careers in economics and business, contact:
National Association of Business Economists, 28790 Chagrin Blvd., Suite 300, Cleveland, OH 44122.
The Margin Magazine, University of Colorado, 1420 Austin Bluffs Pkwy., Colorado Springs, CO 80918.