Is an economics degree worth It? Find out why. - Degreechoices.com (2024)

Often called the “dismal science” due to its pessimistic predictions, economics is the 16th most popular major in the U.S. But is an economics degree worth it? According to government data, yes. Economics majors’ earnings are well above average. Perhaps this isn’t surprising for a group of people who know all about money.

On the other hand, among the many good majors for analytical thinkers that feed into similar jobs – is economics really the optimal choice? In this article, we explore the economic value of an economics degree and compare it to similar college majors.

How much do economics majors make?

On average, economics majors earn $72,055 per year just 4 years after graduating according to the National Center for Education Statistics. That’s 41% more than the national average for all people with a bachelor’s degree ($51,088).

The economics programs with the highest earning graduates are:

• Duke University ($153,139 per year on average)
• The University of Chicago ($127,832)
• Amherst College ($127,636)

So, is economics a good major?

In terms of value for money, getting a bachelor’s degree in economics generally pays off.

According to our methodology for ranking degrees (more on that below), Economics has a weighted average “Economic Score” of 1.69. This puts economics degrees in the top 20% of all majors in terms of investment value. The average payback period for an economics degree is 2.22 years.

The sad truth is that many college degrees are a bad investment. While going to college is still worth it for most people, what major you pick is vital – and economics is a safe bet.

» Read more: How important are your SAT scores?

Economics lies at the intersection of science and the humanities. While often considered a social science, the government has recently reclassified it as a STEM field, which has positive implications for program funding and financial aid.

It is a good major for people who can think analytically, are comfortable with numbers and abstract concepts, but are also interested in the ambiguous factors driving human behavior.

How an economics major stacks up against other degrees

We’ve established that economics is a good major. But is it a great major?

According to a 2015 study by Georgetown University, it’s STEM majors who go on to earn the highest salaries. The study found that only 2 non-STEM fields entered the top-25 highest paid college majors: economics and business, which ranked 24th and 25th respectively (remember that econ wasn’t always considered STEM).

Economics performs worse than most STEM fields

While an economics degree will set you up for an above-average salary, when compared to most STEM fields, the major performs relatively poorly. Many popular STEM majors unlock significantly higher earnings than economics.

Examples include computer science (average earnings 4 years after graduation are $99,158 per year) and electrical engineering ($90,590).

» Also read: Online degrees that pay well

But it performs far better than humanities and the arts

In terms of earnings, you’re far better off studying economics than just about any other non-STEM field. No humanities/arts degrees have higher-earning graduates than economics on average.

For example, communications majors earn $48,109 four years after graduating, English majors earn $40,844, and sociology majors earn $44,332.

Economics vs. finance and other related majors

Maybe computer programming isn’t your thing, and you were never seriously considering theater either.

Like many people, you could be deciding between economics and comparable majors that will open doors to corporate America, like finance, marketing, or business.

Below, we compare the earnings of economics majors 4 years after graduation with those of similar majors.

These majors are categorized according to the National Center for Educational Statistics’ CIP code groupings. The Department of Education assigns each degree program in the U.S. a CIP code based on its name and curriculum.

Unfortunately, the distinctions between some of these categories are blurry, and it is not always possible to determine the CIP code of an individual degree program (e.g., it would be hard to tell if the University of Nebraskahoma’s B.S. in Business has been classified as Business/Commerce, General or Business Administration). The list below should therefore be taken as a roughly indicative guide.

On average, economics majors outperform finance, accounting, and business majors of all stripes, although they earn less money after leaving school than, for instance, stats majors.

» Also read: What’s the difference between a B.B.A. and a B.S. in business?

Students deciding on a major should note that the future earnings and value for money of individual programs vary. For example, the University of Pennsylvania, the college whose finance program has the highest-earning grads, unlocks average salaries of $206,646 – considerably higher than the already impressive highest-earning economics program (Duke, averaging $153,139 per year).

To help you compare majors, we have compiled detailed rankings of the best business administration, finance, marketing, HR, and accounting programs, which include earnings data and much more.

Do econ majors have to go to a top college to succeed?

Some people believe that economics is only a good major if you can get into a so-called “top-20” school (according to U.S. News and World Report’s highly flawed ranking system).

To verify this, we split colleges into 6 “tiers of selectivity” according to what percent of students they accept each year, as shown below:

• Extremely selective colleges: less than 10% of applicants accepted
• Very selective: between 10% and <25% accepted
• Moderately selective: between 25% and <50% accepted
• Moderately inclusive: between 50% and <75% accepted
• Extremely inclusive: between 75% and 99% accepted
• Open admissions: everyone gets in

Then, we checked the average earnings of economics majors at colleges in each of these tiers.

Our findings are presented below. The number of schools in each group is given in parentheses. All data is sourced from IPEDs and College Scorecard.

Economics

Unsurprisingly, the more selective a college, the more its econ majors earn.

However, economics students do pretty well across the board. Econ majors at “extremely inclusive” colleges are still earning 22% more than the national average for all people with a bachelor’s degree ($51,088).

While econ majors at open-admissions colleges earned less than average, there is only 1 college in this category – others may exist, but they have not disclosed data to the Department of Education.

To put these numbers in perspective, we have also crunched the numbers for business administration majors, as shown below:

Business Administration

For business administration, there is a much sharper drop in earnings for those who don’t get into an extremely selective or very selective school. Business administration majors at very selective colleges go on to earn 64% than their peers at moderately selective institutions.

Therefore, While Bachelor of Business Administration (BBA) students may be right to worry about how “prestigious” their alma mater is, economics majors can relax a little: an economics degree is worth it even if they don’t go to an Ivy League.

» Also read: How much do acceptance rates really matter?

Do econ majors need to go to grad school?

On average, people with a master’s degree in economics earn $79,733; that is only 11% more than bachelor-level earnings. For context, people with a master’s degree earn 36% more than people with just a bachelor’s degree on average according to IPEDS data.

This tells us several things.

1. Most economics majors are doing just fine with only a bachelor’s degree.
2. Economics majors who are looking for a career boost may want to consider alternative master’s programs instead.

That said, there is one notable reason you might want a master’s degree in economics: you want to work as an economist.

There is one notable reason you might want a master’s degree in economics: you want to work as an economist.

According to the Bureau of Labor Statistics, the average economist earns a not-too-shabby salary of $113,940 per year, and most of them have an advanced degree: 37.7% have a master’s and 36.3% have a doctorate. Only 26.1% of economists have a bachelor’s.

However, most econ majors are not working as economists. Instead, they go on to get other corporate jobs, roles like manager, budget analyst, data scientist, or market researcher, to name a few.

» Also read: We rank the best master’s in economics programs.

Boosting your career as an econ major

Econ majors looking for a career boost have many grad school options.

Below, we list the average earnings for various master’s programs that economics majors may be considering. This chart illustrates that many master’s programs offer a better earnings boost than an MS in economics.

While it’s a good degree choice for undergrads, many programs outshine economics at the master’s level – including finance and business.

Prospective master’s students should remember that it’s not always possible to ascertain what CIP code a certain degree program belongs to. Thus, a master’s in business administration (MBA) could be categorized as “Business/Commerce, General” or “Business Administration” depending on its curriculum.

Some CIP codes have few associated programs. While the Department of Education has complete data for only 6 colleges offering a master’s degree in entrepreneurship (the top performer on this list), 718 programs fall under the Business Administration code. This skews the data.

Always remember that the value of studying economics depends partially on the individual program – as well as your professional/personal network, work ethic, and sheer good luck.

What can you do with an economics degree?

One distinguishing feature of the bachelor’s in economics is its versatility. Because knowledge of economics is relevant to many jobs in the corporate world – as well as in other sectors – econ majors are well equipped to find a lucrative career after graduation, even if their job is not directly related to their studies.

Below are some examples of jobs available to economics majors, as mapped by the Bureau of Labor Statistics.

Because many of these programs are not specifically looking for economics majors, you will need to work on your networking skills, polish your CV, and keep an open mind when you’re searching for your first job. Your career journey may be more winding than that of a nurse or engineer.

Nevertheless, the data shows that ultimately, economics majors are not struggling to find gainful employment.

The best economics programs

According to our methodology, which ranks programs by value for money, the top 3 Economics programs in the country at the bachelor’s level are:

1. CUNY Hunter College
2. Stanford University
3. Harvard University

For the ultimate list of the best Economics programs, check out our detailed rankings. You will find information on program costs, acceptance rates, future earnings, and much more.

Final thoughts

If you’re an undergraduate student, economics is a good major, although STEM subjects like engineering do lead to better earnings. An economics degree offers a solid return on your educational investment – compared to both business-adjacent degrees and those in the humanities.

Why is econ such a good major?

While economics students do not enjoy a clear career pipeline, the degree’s versatility opens the door to jobs in the corporate world – even without a master’s degree. Employers know that econ majors combine astute insight into human behavior with strong numerical skills.