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You can download Professor Obst's slides here - MSU Economics ...

  1. 1. Economics The Hot Major
  2. 2. The Hot Major <ul><li>The Hot Major for Undergrads Seeking High Pay Is Economics </li></ul><ul><ul><li>by Jessica E. Vascellaro Provided by </li></ul></ul><ul><li>Colleges and universities in the United States awarded 16,141 degrees to economics majors in the 2003-2004 academic year, up nearly 40 percent from five years earlier </li></ul>
  3. 3. The Economics Major <ul><li>The number of college students majoring in economics has been rising since the mid-1990s, according to the government's National Center for Education Statistics  </li></ul><ul><ul><li>Meanwhile, the number majoring in political science and government has declined and the number majoring in history and sociology has barely grown </li></ul></ul><ul><li>&quot;There has been a clear explosion of economics as a major,&quot; says Mark Gertler, chairman of New York University's economics department </li></ul>
  4. 4. Top Colleges <ul><li>The number of students majoring in economics has been rising even faster at top colleges. At New York University, for example, the number of econ majors has more than doubled in the past ten years. At nearly 800, it is now the most popular major </li></ul><ul><li>Economics also is the most popular major at Harvard University in Cambridge, Massachusetts, where 964 students majored in the subject in 2005. The number of econ majors at Columbia University in New York has risen 67 percent since 1995. The University of Chicago said that last year, 24 percent of its entire graduating class, 240 students, departed with economics degrees </li></ul>
  5. 5. The Turnaround <ul><li>Behind the turnaround is a clear-eyed reading of supply and demand: In a global economy filled with uncertainty, many students see economics as the best vehicle for a job promising good pay and security </li></ul><ul><li>And as its focus broadens, there are even some signs that economics is becoming cool! </li></ul>
  6. 6. Cool! <ul><li>In addition to probing the mechanics of inflation and exchange rates, academics now use statistics and an economist's view of how people respond to incentives to study issues such as AIDS, obesity and even terrorism. The surprise bestseller of the Spring was Freakanomics, a book co-authored by a University of Chicago economist, Steven Levitt, which examines issues ranging from corruption among real estate agents to sumo wrestling. </li></ul>
  7. 7. <ul><li>Jotwani, a recent graduate of Georgetown University in Washington, D.C., says she is certain her economics degree helped her land a job in Lehman Brothers Holdings Inc.'s sales and trading division, where she will earn $55,000, not including bonus. She says the major strengthened her business skills and provided her with something very simple: financial security </li></ul>Recent Graduates
  8. 8. <ul><li>According to the National Association of Colleges and Employers, economics majors in their first job earn an average of nearly $43,000 a year --- not as much as for computer science majors and engineering majors, who can earn in excess of $50,000 a year. But those computer and engineering jobs look increasingly threatened by competition from inexpensive, highly skilled workers in places like India and China. </li></ul>The Economics Major
  9. 9. Desirable Majors <ul><li>Economics and business majors ranked among the five most desirable majors in a 2004 survey of employers by the National Association of Colleges and Employers, along with accounting, electrical engineering, and mechanical engineering. </li></ul><ul><ul><li>It wasn't just banks and insurance companies that expressed interest in economics majors --- companies in industries such as utilities and retailing did so, too. </li></ul></ul>
  10. 10. More Employable <ul><li>AfterCollege Inc., a San Francisco online recruiting service with 267,000 registered users, says an economics major has practical job value. &quot;Students are more employable if they study economics,&quot; he says. He graduated from Stanford University with an economics degree five years ago. </li></ul>
  11. 11. Jobs <ul><li>Virtually every organization -- for-profit, nonprofit, or government at all levels -- hires people to: </li></ul><ul><ul><li>Handle the organization's finances </li></ul></ul><ul><ul><li>Market their product or service and, if large enough, do marketing research </li></ul></ul><ul><ul><li>Analyze the creditworthiness of customers and handle outstanding credit accounts </li></ul></ul><ul><ul><li>Work in human resources departments, helping to hire and transfer personnel, solving problems, and being the expert on fringe benefits </li></ul></ul><ul><ul><li>Interface computer hardware and software with their business operation. Many economics majors who also have a solid computer background work as systems analysts </li></ul></ul>
  12. 12. Jobs <ul><li>Some firms also hire people with an economics background to: </li></ul><ul><ul><li>Sell a product or service or manage a small retail outlet </li></ul></ul><ul><ul><li>Help do research on economic aspects of their operation </li></ul></ul><ul><ul><li>Manage production workers </li></ul></ul><ul><li>In addition to private businesses, economics majors get hired by: </li></ul><ul><ul><li>Financial institutions and the agencies that regulate them </li></ul></ul><ul><ul><li>Economic development agencies </li></ul></ul><ul><ul><li>Government tax departments and agencies that regulate businesses </li></ul></ul>
  13. 13. A Sample of Possible Occupations Underwriter Lawyer Technical Writer Labor Relations Specialist Economic Research Assistant Systems Analyst Job Developer Demographer Statistician Job Analyst Credit Officer Securities Broker Investment Counselor Cost Analyst Real Estate Investor Investment Banking Analyst Controller Purchasing Agent International Trade Specialist Commodities Trader Public Administrator Insurance Agent/Broker Commodities Analyst Property Manager Human Resources Administrator Collection Agent Project Coordinator Health Policy Planner Claims Examiner Product Manager Financial Researcher Business Manager Mortgage Loan Officer Financial Planner Benefits Administrator Marketing/Sales Manager Financial Analyst Bank Research Analyst Market Research Analyst FBI/CIA Agent Bank Examiner Management Accountant Economist Actuary
  14. 14. Business Economists <ul><li>Where do business economists tend to spend their time on the job? Take a look at the following table:    </li></ul><ul><li>Forecasting and analysis of U.S. economy 21% </li></ul><ul><li>Industry forecasting and analysis 24% </li></ul><ul><li>International forecasting and analysis 14% </li></ul><ul><li>Product forecasting, microeconomics 10% </li></ul><ul><li>Domestic policy analysis 8% </li></ul><ul><li>Other areas of analysis 14% </li></ul><ul><li>Administration 9% </li></ul><ul><li>Source: Dennis K. Hoover, &quot;Business Economists: Not Just Forecasters,&quot; Business Economics 27 (July 1992): 56-59. </li></ul>
  15. 15. Government Economists <ul><li>Almost all government and government agencies hire economists   </li></ul><ul><ul><li>In the federal government, both Congress and the Executive Branch have economic advisors. For example, the President has the Council of Economic Advisors and Congress has the Congressional Budget Office to supply economic analysis. </li></ul></ul><ul><ul><li>State and local governments also hire economists to perform similar tasks as their federal counterparts </li></ul></ul>
  16. 16. Government Economists <ul><li>Most departments have agencies established to perform economic research and analysis. For example, the Labor Department relies on the Bureau of Labor Statistics to act as the principal fact-finding agency in the broad field of labor economics and statistics. The Commerce Department relies on the Bureau of Economic Analysis to act as the nation's economic accountant, preparing estimates that illuminate key national, international, and regional aspects of the U.S. economy. The Department of Agriculture relies on the Agricultural Research Service and the Environmental Protection Agency relies on the Office of Policy, Planning, and Development. The list goes on. </li></ul>
  17. 17. Types of Employers Telecommunications Firms Educational Institutions Retailers Economic Research Foundations Pharmaceutical Companies Economic Development Council Personnel Agencies  Consulting Firms Market Research Firms Collection Agencies  Manufacturers Chambers of Commerce Labor Unions Business Journals / Publishers Investment Banks Brokerage Firms Insurance Companies  Banks Import/Export Firms Accounting Firms Private and Non-profit Organizations
  18. 18. Types of Employers Securities and Exchange Commission Environmental Protection Agency Office of Personnel Management Department of the Treasury International Trade Commission Department of Transportation Internal Revenue Service Department of Labor  General Services Administration  Department of Agriculture Federal Trade Commission  Consumer Product Safety Commission Federal Reserve Bank  Commodity Futures Trading Comm. Federal Deposit Insurance Corp Commerce Department Farm Credit Administration Central Intelligence Agency Government Agencies
  19. 19. Maximize Opportunities <ul><li>Become Computer Savvy </li></ul><ul><li>Take Some Accounting </li></ul><ul><li>Get Work Experience and Do At Least One Internship </li></ul><ul><li>Take Rigorous Courses and Earn Good Grades </li></ul><ul><li>Become Good in Math </li></ul><ul><li>Develop Good Writing Skills </li></ul><ul><li>Take Part in Cocurricular Activities </li></ul><ul><ul><li>Become involved in student government, clubs, athletics, or volunteer work (if job work permits) </li></ul></ul><ul><li>Go Abroad </li></ul>
  20. 20. Famous Economics Majors <ul><li>Dick Armey: US Congressman (University of OK) </li></ul><ul><li>Steve Balmer: Executive VP, Microsoft (Harvard) </li></ul><ul><li>William F. Buckley: Journalist (Yale) </li></ul><ul><li>Jim Bunning: US Congressman/Hall of Fame Baseballer (Xavier) </li></ul><ul><li>George Bush: Former US President (Yale) </li></ul><ul><li>Sandra Day-O'Connor: US Supreme Court Justice (Stanford) </li></ul><ul><li>John Elway: NFL quarterback (Stanford) </li></ul><ul><li>Phil Gramm: US Senator (University of Georgia) </li></ul><ul><li>William Isaac: Former Chairman of FDIC (??) </li></ul><ul><li>Mick Jagger: Rollings Stones (London School of Economics) </li></ul>
  21. 21. Famous Economics Majors <ul><li>Alex Keaton: TV sitcom character (??) </li></ul><ul><li>Bernie Kosar: NFL quarterback (University of Miami) </li></ul><ul><li>Mike Mussina: MLB Pitcher (Stanford) </li></ul><ul><li>Merlin Olson: Actor/Former NFL player (??) </li></ul><ul><li>Ronald Reagan: Former US President (Eureka College) </li></ul><ul><li>Roy Romer: Governor of Colorado (Colorado State; Ag Econ) </li></ul><ul><li>Lionel Ritchie: Singer/Songwriter (??) </li></ul><ul><li>George Schultz: Former US Secretary of State (??) </li></ul>
  22. 22. Famous Economics Majors <ul><li>Arnold Schwartzenegger: Actor/Producer/Governor (University of Wisconsin) </li></ul><ul><li>Richard Trumka: President of United Mine Workers (Penn State) </li></ul><ul><li>Ted Turner: CNN, Atlanta Braves/Hawks (Brown) </li></ul><ul><li>Mario Van Peebles: Actor/Director (Columbia) </li></ul><ul><li>Lenny Wilkens: NBA Coach/Hall of Famer (??) </li></ul>
  23. 23. What Can I Do With An Economics Major? <ul><li>Tony Troy '00 writes: Working as a junior economist at the Bureau of Economic Analysis within the U.S. Department of Commerce, I am primarily responsible for estimating a major component of gross private domestic investment, which is one of the components of the U.S. gross domestic product (GDP). The work involves preparing monthly estimates, investigating new sources of data, conducting research and analysis, and developing new estimating procedures and methods. LAN-based computer systems and statistical programming are used intensively in carrying out all of these activities. </li></ul>
  24. 24. What Can I Do With An Economics Major? <ul><li>Kevin Lam '00 writes: I am now in Law School at Harvard.  Nowadays, an Economics degree is one of the most helpful degrees to have for an entering law student.  Furthermore, the field of Law and Economics is in a stage of growth, evidenced by top law schools' shoring their ranks with professors who have graduate degrees in Economics.  Finally, Macroeconomics is the language of those who make public policy in legislatures, executive offices, etc., and Microeconomics is the language of corporate lawyers who are working for large law firms or as in-house counsel. </li></ul>
  25. 25. What Can I Do With An Economics Major? <ul><li>Molly Fifer '01 writes: I work for the Brookings Institution in Washington, DC, as a research assistant in the Economics Studies program. I do research for two scholars in two areas of labor economics: income inequality and welfare. I do mostly quantitative analysis, ie. manipulating data, basic econometrics. This is well balanced by the fact that all of my work is motivated by current socioeconomic problems, such as the increasing proportion of black children who are raised in poor single-parent families or the effect of increases in the national unemployment rate on the poverty population. </li></ul>
  26. 26. What Can I Do With An Economics Major? <ul><li>Carolina Krawiec '01 writes: I've been working as a research assistant in the Labor and Social Policy (LSP) Center of The Urban Institute in Washington, DC for about four months. The Urban Institute is a public policy think tank, and in addition to LSP there are centers focusing on topics including health policy, education policy, and population studies. I've worked on projects dealing with family structure and economic outcomes, school-to-work and youth apprenticeship programs, evaluating victim services and criminal justice programs for victims of domestic abuse, and developing weighting procedures for non-telephone households in telephone surveys.   </li></ul>
  27. 27. What Can I Do With An Economics Major? <ul><li>Michael Simidjian '01 writes: I work at the corporate headquarters of Mervyn's as a financial analyst and internal auditor. My responsibilities include the collection of data and creation of reports about inventory and sales and analysis of the company's sales from regional, store, divisional, and departmental levels. The work I do gives me exposure to the operations of a major retailer and the ability to work closely with executives to assess what factors will increase future sales and revenue. </li></ul>
  28. 28. What Can I Do With An Economics Major? <ul><li>Jay Liao '99 Currently, I work as a Senior Consultant working in the Economics and Transfer Pricing group at Ernst & Young.  In a nutshell, I help companies maximize their after-tax net income by advising them on appropriate economic terms for their cross-border (intercompany) transactions.  To be effective in doing this work, a solid understanding of accounting (i.e., being able to understand a company's financial statements), economics (i.e., industrial organization, basic econometrics) and basic finance (e.g., cost of capital) is good to have. </li></ul>
  29. 29. More Information <ul><li>The Bureau of Labor Statistics publishes an annual report on the career options for Economists in the American economy in its Occupational Outlook Handbook </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>