How to Become an Economist - Education & Qualifications
An economist studies the production, consumption, and transfer of wealth, and by putting that study into practice, they move the levers of modern society. On a political level, economics drives the physical development of nations, the social reforms of governments, and the rise and fall of authoritarians. On the personal level, economics can feed famished populations, create green-energy revolutions, and empower the consumer through new microloan products.
Economists are critical in both understanding and harnessing the power of economics. They research economic issues, conduct surveys to collect data, study economic trends through statistical and mathematical analysis, and present their research to businesses, governments, and individuals. This analysis also allows them to suggest courses of action that take into consideration the goals of a corporation, government, organization, or individual.
Jobs for economists are projected to increase 6 percent nationwide between 2016 and 2026, which is about as fast as average across all professions in the U.S. However, economics as a field has grown increasingly complex, and competition for economist jobs have reflexively begun to favor those with a master’s degree or a PhD.
The fact that Washington DC employs five times as many economists as any individual state in the U.S.—and ten times as many as any other metropolitan area—is telling. The government remains the largest employer of economists. But academia employs its fair share as well, and the Boston-Cambridge metropolitan area is the second highest employer of economists in the U.S. In the private sector, oil and gas or other utilities-based companies rely on economists as part of forming and operationalizing their business model, as do large financial institutions.
Economists have a wide spectrum of pay. The top ten percent earn $172,580 (and up) per year, while the lowest ten percent earn just $56,400 (or less) per year. An economist’s employer and geography play a large factor in determining where one places on that spectrum. Economists earn the most in the private sector, a fact reinforced by BLS data the shows Los Angeles, New York City, and San Jose (home of Silicon Valley) as the areas with the highest average salary for economists—between $152,540 and $137,020 per year. However, the average salary for an economist working in the Washington DC area isn’t that far behind, at $125,290 per year, which is above the nationwide average of $102,490.
Economics lies at the heart of practically everything in the modern world. Economists may work primarily with numbers and data sets, but their findings and recommendations have the power to create change in massive and meaningful ways. If you’re interested in studying how the gears of modern society tick, read on to get a step-by-step guide on how to become an economist.
Step-by-Step Guide to Becoming an Economist
Step One: Earn a Bachelor’s Degree (Four Years)
After graduating from high school, prospective economists need to earn a bachelor’s degree. While there is some flexibility in which type of undergraduate degree an economist can have (e.g., accounting, finance, mathematics), majoring in economics is obviously the strongest option for someone committed to the subject.
Bachelor’s degrees in economics come in two main categories: the bachelor of arts in economics (BA) and the bachelor of science in economics (BS). BA degrees in economics tend to focus on theory and social sciences. For example, the BA in economics degree from NYU specializes in economic theory, macroeconomics, international economics, and economic growth and development. On the other hand, BS degrees in economics, such as the one offered by the University of Pennsylvania, focus on the application of business methods and economic theory to real world problems, prioritizing mathematical and statistical knowledge. While neither degree is, in a vacuum, better than the other, a BS degree in economics may provide a stronger foundation for future graduate-level study.
Several economics undergraduate programs, both BA and BS, offer dual-degree options that pair with another field like mathematics or computer science. And even within a singular economics degree, many universities allow students to specialize in a particular area of focus by adding a concentration in behavioral economics, healthcare, finance, or environmental policy. Building a strong base of foundational knowledge, while exploring possible concentrations and further areas of focus through free electives, can prepare an economist to select the next steps of their journey.
Step Two: Research Internship Opportunities (One to Two Years, Optional)
Relevant work experience is the best education one can get. Full-time paid positions for people with bachelor’s degrees in economics do exist, but they’re few and far between, and may not contain many opportunities for advancement.
Internships may be unpaid positions, but they’re a solid way to gain relevant experience applying the skills you’ve recently learned. Many of today’s economist internships ask that applicants have a working understanding of Python, R, and other data visualization software. These internships also include working alongside full-time employees, and working at the full pace of operations, which provides extremely valuable hands-on experience for later applications to graduate programs or other full-time jobs.
Some internships require applicants to be currently enrolled in an undergraduate or graduate program, but they may also subsidize part of an intern’s tuition. While this is a completely optional step, the final years of an undergraduate degree up to the first year of a graduate degree program are the ideal time to begin researching and applying for economist internships.
Step Three: Pursue a Master’s Degree (Two Years)
In a competitive market, differentiation is critical. And for economists, a master’s degree is now almost as standard as a bachelor’s degree. Economists have two general options here: an MBA with an economics concentration or a master’s degree in economics (either MA or MS).
An MBA provides a broad and generalist foundation of business knowledge, and the specialization in economics comes as a smaller and secondary learning priority. For example, the MBA with an specialization in economics at NYU Stern supplements its baseline MBA program with classes in econometrics, the economics of healthcare, the economy and financial markets, growth in the developing world and the global economy, and energy and the environment. While such a program does provide a broad exposure to several of the more nuanced directions that economists can take, it doesn’t prepare a graduate for a doctoral degree or for work as specialized economist.
A master’s degree in economics, either a master of science (MS) or a master of arts (MA), is a deep and purist approach to graduate-level study for economists. Any school’s degree program and curriculum need to be evaluated against one’s personal goals for their future career as an economist. There may be an industry bias towards the MS degree being more rigorous, but plenty of MA programs take a sternly quantitative approach, such as the MA program from Duke’s Trinity College of Arts and Sciences, which includes several classes in advanced microeconomic and macroeconomic analysis, applied econometrics, and both time series and financial econometrics.
In any event, an MS or MA in economics is the ideal time for a prospective economist to choose which sub-discipline of economics they wish to work in. For example, the MS in economics offered by Drexel’s LeBow College of Business allows students to pick one of three tracks for their degree: public policy, for those who want to work in government or nonprofit sectors; industry, for those who wish to work in the private sector; and academic research, for those who intend to pursue a PhD in economics.
The MS in economics at Purdue’s Krannert School of Management offers specializations in theoretical and applied concepts, business and data analytics, financial economics, public economics and policy, and advanced theory.
Step Four: Gain Work Experience (Timeline Varies)
After earning a master’s degree, the training wheels are off and it’s time to enter the workforce. Your specializations and academic arc up to this point should suggest which type of employer you’ll be seeking out.
Those interested in working for the private sector will be looking in major metropolitan areas for opportunities with employers like oil and gas companies, utility companies, large financial institutions, and real estate firms. Those more ideologically aligned will seek out work with green energy businesses, think tanks, governments, universities, and nonprofits.
Economists of all sorts spend the majority of their time behind a computer, working with data analysis. But they also work side by side with policy experts, statisticians, and executives to dictate economic strategy. A centralized organized platform, Job Openings for Economists, run by the American Economic Association, exists to help economists build their careers.
Step Five: Consider a PhD (Four to Seven Years, Optional)
For the extremely dedicated economists who aren’t afraid of academia, a PhD is an option to consider. Some schools don’t require a master’s degree, while others, such as the PhD program at Stanford, offer a reduction in course load for those who have already completed a master’s.
Classes, seminars, and workshops in a PhD program will entirely depend upon one’s selected area of focus. But in every case it’s incredibly important to have a strong mathematical ability, generally scoring better than the 90th percentile on the quantitative portion of the GRE.
In an economics PhD program, you can select what to research from a wide range of options, and you’ll be given relative autonomy in completing your studies and dissertations over the intervening years. The most popular areas of focus for economics PhD students are macroeconomics, labor economics, microeconomic theory, industrial organization, and development. Despite the autonomy, you will most likely be required to teach at the university for some amount of time during the course of completing your PhD. This means an intensive work and study schedule that you may need to take authorship over. Disciplined, self-starting multitasking is a must.
The good news is that for all this work you are practically guaranteed a job; those holding a PhD in economics have a very low unemployment rate. Those with an economics PhD can teach at the university level, and are counted as experts in their field. Outside of academia, economists with PhDs go on to work for some of the biggest and highest impact organizations there are: the International Monetary Fund, the Federal Reserve, the Treasury, RAND, and the World Bank.
Step Six: Join Professional Societies and Achieve Certification (Timeline Varies)
Once you’ve collected your degrees, it’s time to mix with your economist colleagues through professional societies. These organizations host conferences, talks, and think tanks that keep the academic rigor alive well into the late stages of an economist’s career. They also act as a broker of standards for professional excellence.
The National Association of Business Economics (NABE), for example, offers professional certification as a Certified Business Economist (CBE). Applicants who have at least a four-year degree, two years of work experience, and membership with NABE are eligible to take the multiple-choice CBE exam, which covers applied econometrics, statistics and data analysis, economic measurement, managerial decision making, macroeconomics, and microeconomics. The three-and-a-half hour exam is offered once a month, and applicants can either self-study or enroll in some of NABE’s preparatory courses. While not a requirement, holding such a certification cements an economist’s authority as an expert, and acts as a mark of distinction.
Helpful Resources for Economists
Economics is an ongoing conversation between differing worldviews and theories, and economists must continue their own self-directed educations long after they’ve finished school by staying up-to-date on where the global conversation is heading.
Only through the competition of rigorously peer-reviewed theories and studies can more perfect understandings of economics evolve. To this end, many economists join professional societies and engage with academic journals. If you want to eavesdrop on where the economic conversation is headed at this very moment, check out some of the resources below:
- American Economic Association (AEA)
- Association for Social Economists (ASE)
- National Association for Business Economics (NABE)
- World Economics Association (WEA)
- Job Openings for Economists
- Journal of Political Economy
- Journal of Financial Economics
- Cambridge Journal of Economics
- The Review of Economic Studies