Professional Benefits of an Economics Degree
What Helped & Challenged Me
Intro:
Hello.
This post is simply about highlighting the professional benefits of an economics degree that I have seen and experienced firsthand.
As a graduate with a Bachelor of Science degree in Economics, I have experienced firsthand the unique advantages and professional benefits this field of study offers. In this blog post, I aim to share the insights and knowledge I've gained, from my perspective, highlighting how an economics degree can equip you with critical analytical skills, open doors to diverse career opportunities, and provide a solid foundation for navigating the complexities of today's global economy. I will specifically highlight how it has positively benefitted my career.
I will also briefly cover some of the cons of the field of study that I have seen play out.
Feel free to share your experiences and insights in the comments below, letting us know the perspective you come from (prospective student, degree holder, professional who hires economics graduates, economist, amateur economist, etc.). Fostering a community of shared knowledge and support lets us learn from each other and grow together.
Disclaimer:
I should add that the University of Utah is one of, if not the most, cost-effective 4 year degree issuing institution in the country for in-state students. The total cost of my degree was around $30k. So, as I discuss the positives of this degree, keep this in mind, because if the degree cost me $180k, like is typical of many institutions, I simply would not have done it. Indeed, the cost-benefit analysis that the degree taught me how to do would necessitate I do not do it.
Additionally, throughout this blog post we are going to assume one actually learns the material, studies hard, and learns some data analysis or participates in some form of economic research.
Table of Contents:
Personal Growth:
Potentially the most impactful part of any 4 year university degree is the personal growth that occurs during the time to completion. A 4 year degree requires conviction, pushing past burnout, following through on a long-term goal, and learning how to balance life (physically, socially, academically, professionally, etc.). These are all invaluable skills that inform many hiring managers decision making.
However, there are also unique personal growth attributes that specifically occur from an economics degree. Let’s cover some of them:
Economic Humility:
Any 4-year degree that is sufficiently hard enough teaches you humility. However, specifically within economics, it teaches you what I call ‘economic humility’. If you study economics long enough and deeply enough, you will realize just how difficult it is to understand. Here is an excerpt from my last blog post that covers this:
“We may wish inputs were linear but they really act like a reflexive strange loop where the outputs themselves are inputs in a forever recursive and evolving process that is both robust and delicate. There are no exogenous variables. Treating something as exogenous should only be done to gain greater clarity on an underlying variable. The culture of a nation, the philosophical zeitgeist, and the prevailing paradigm manifest in belief systems that form the core of economic reality during any given time. As these change so to will the economy.” - You can link directly to this section here.
Economics is a behavioral science. As you begin to try to describe human behavior accurately, you find you must also accurately describe the behavior of the environment around the economic agent. Behavior is not something that can typically be isolated from the world around you or a subject. This means, in trying to explain economic behavior, that the laws of human behavior that the field elucidates will never be immutable, and they will be subject to the ongoing evolution of human behavior through time. When you factor in the speed of progress of technological development and how this subsequent technology affects human behavior, this becomes a daunting task.
There are exceptions of extraordinary individuals, who have been able to transcend the effects and influence of their environment, but they are not the norm, and therefore, they are not in the typical scope of study for the field of economics. Economics concerns itself with describing and predicting economic phenomena in general. There will be exceptions to every distribution but the curve itself, holds the most insight.
If you take the subject of economics seriously, and truly read your materials and take part in some economic research, then you cannot help but develop some economic humility. This economic humility serves one quite well throughout their career, as they will always take a skeptical eye surrounding any economic tautology, forecast, or prediction. This freedom from tautologies encourages creative freedom. Meaning, you know that economic reality can be created rather than just observed - opening the door for many new innovative and entrepreneurial outlooks. This humility also helps prevent you from doing anything stupid in business or in policy. You look at options with equanimity and refrain from knee jerk reactions until you see and analyze the data for yourself. Equanimity is an attribute of wisdom and studying economics helps develop it.
Critical Thinking:
The next major attribute of personal growth resulting from studying economics is the development of critical thinking skills. Economics, as a discipline, requires a rigorous and analytical approach to understanding complex systems, behaviors, and phenomena. This fosters a mindset that is not only evidence-based but also skeptical of oversimplifications and unsubstantiated claims.
Seeing Reality: Data-Driven Thinking
"Many people accept words as indicators of reality." Thomas Sowell
An essential aspect of critical thinking in economics is the ability to see reality clearly, guided by data rather than wishful thinking or personal biases. The discipline teaches you to prioritize evidence-based reasoning, where conclusions are drawn from verifiable facts and reliable data. This approach helps in making informed decisions, whether in personal life, academia, or the professional world.
Unique Knowledge and Perspectives
Through my studies, I've gained unique insights into the application of critical thinking. For instance, economics teaches us that theories and models are tools for understanding reality, not absolute truths. This perspective encourages a healthy skepticism, prompting us to question assumptions and consider multiple viewpoints before forming a judgment. It's about understanding the limitations of data and the context in which it was gathered, which can significantly impact the interpretation and implications of that data.
Application in Professional Life
The critical thinking skills honed through an economics degree are invaluable in the professional world. In today's fast-evolving technology and business landscapes, the ability to analyze data, assess risks, and make data-driven decisions is crucial. The training in economics helps professionals navigate these challenges by providing a framework for understanding and interpreting complex information.
For example, in my career, I've found that the ability to critically assess economic forecasts, business plans, models, and market analyses have been instrumental in making sound decisions. This skill is particularly important in roles that require strategic planning, investment decisions, or policy formulation, where the stakes are high and the outcomes can significantly impact an organization or society.
Equanimity and Open-Mindedness
Critical thinking also cultivates equanimity—a balanced and composed approach to problem-solving. This quality is especially valuable when facing uncertainty or conflicting information. An economist's training encourages a thorough examination of all available evidence before reaching a conclusion, helping to avoid rash decisions based on incomplete or biased information.
The critical thinking skills developed through an economics degree are not just academic exercises but practical tools that enhance your ability to navigate the complexities of the real world. Whether you're analyzing market trends, evaluating economic policies, or making personal financial decisions, these skills provide a solid foundation for thoughtful and informed action.
Broadened Worldview:
Studying economics significantly broadens your worldview by exposing you to a diverse range of perspectives and concepts. Economics is inherently a global field, requiring you to consider how different countries, cultures, and economies interact. This exposure helps you understand the complexities of global interdependence (and independence), trade, and policy, fostering a more nuanced and comprehensive understanding of the world. For example, learning about international trade theories and policies enables you to appreciate how interconnected our world is and how economic decisions made in one part of the globe can have far-reaching consequences.
This broadened worldview also encourages empathy and cultural sensitivity. When you study economics, you delve into the socio-economic challenges faced by various populations, from income inequality and poverty to healthcare and education. But you also will understand the competing arguments, allowing you not to be rash in your support of any economic policy. This understanding helps you appreciate the diverse economic experiences of people from different backgrounds, fostering a sense of global citizenship. This empathy is crucial not only in professional settings, where you'll likely work with people from diverse backgrounds, but also in personal interactions, making you a more well-rounded and understanding individual.
Moreover, a broadened worldview enhances your ability to think critically about business challenges and contribute meaningfully as a team member in a for-profit organization. By understanding the economic principles underlying market dynamics, you can engage more thoughtfully in discussions about strategy, resource allocation, and competitive positioning. This ability to analyze and articulate informed opinions on complex business issues makes you a valuable asset to many teams, providing insights that can drive better decision-making and innovation. Your global perspective and cultural sensitivity also fosters effective collaboration with colleagues from diverse backgrounds, enriching your organization's culture and broadening its strategic outlook.
In addition, this ability to analyze and articulate informed opinions on complex issues makes you a valuable contributor to any community, enriching both your professional and personal life as you engage more deeply and sensitively to the global community surrounding you.
Understanding Consequences of Economic Reality:
“Economics is not just about money; it's about the very fabric of society, and the quality of life. The consequences of economic decisions can indeed be a matter of life and death” Thomas Sowell emphasizes in "Basic Economics."
This understanding instills a deep respect for the gravity of economic policy and decisions, whether at the government level, within organizations, or on a personal scale. Every economic action carries the weight of potential unintended consequences, much like ecological interventions that often result in cascading negative effects - so too can economic decisions have cascading negative effects. For instance, government subsidies meant to aid certain industries can inadvertently distort markets and harm other sectors, revealing the complex interdependencies within an economy (aka an ecosytem we call an “economy”).
Throughout my career, I have witnessed firsthand the far-reaching impacts of economic decisions. Having experienced six major business and investment failures (and consulted through several others), I have seen how these missteps can negatively affect not only the individuals directly involved but also their families, communities, and even broader economic systems. This personal journey has highlighted the critical importance of making informed and well-considered economic choices. It underscores the need for a profound respect for capital, labor, and the consequences of uninformed citizenship. These experiences have taught me that economic reality is not to be taken lightly, as misjudgments can lead to devastating outcomes for employees, shareholders, and the community at large.
Understanding the severe consequences of economic decisions equips you with a keen sense of responsibility and analytical rigor, making you a valuable team member in any organization. This respect for economic reality ensures that you approach business challenges with a comprehensive, well-informed perspective, minimizing the risk of costly mistakes. Your ability to foresee the broader impact of decisions fosters a culture of careful deliberation and strategic thinking within the team. Moreover, your experiences with both success and failure enrich your contributions, allowing you to offer practical insights and innovative solutions. This mindset not only enhances the organization's decision-making processes but also promotes a resilient and adaptable business environment, driving sustainable growth and success.
Market Knowledge:
Understanding market dynamics is a pivotal benefit of studying economics, providing you with the ability to navigate the complexities of today's global economy. Economics teaches you about the pulleys, levers, catalysts, and domino effects within an economic system. This knowledge equips you to foresee trends, identify bottlenecks, and understand the headwinds and tailwinds impacting new technologies, businesses, or policies and how they reverberate throughout the economy.
For instance, studying how incentives shape behavior can be particularly valuable from a managerial perspective. Designing effective incentives to align with team or organizational goals requires an intricate understanding of human behavior and economic principles. Economics offers a framework for creating incentive structures that drive productivity and innovation while avoiding potential pitfalls such as moral hazard or perverse incentives.
Additionally, an economics degree fosters a nuanced appreciation of market forces and their ripple effects. By analyzing historical data and current market conditions, you can develop strategies that anticipate market movements and mitigate risks. This foresight is invaluable in roles involving strategic planning, investment, and policy-making, where understanding market signals and responding proactively can make a significant difference.
Moreover, studying economics enhances your ability to decipher complex market signals and adapt to shifting economic landscapes. The analytical tools and methodologies learned in economics courses enable you to evaluate the impact of various economic policies and market changes. This capability is crucial in today’s fast-paced business environment, where timely and informed decisions can be the difference between success and failure.
Examples:
How will Biden’s new Infrastructure Act affect our construction firm in Ohio? Will we be able to get these government contracts, or will inflation just cause us to not be able to afford materials and put us under water in our bidding?
How will AI diffuse through the economy? Is it better to be a first mover on this technology, or should we wait until the technology is proven out more?
Lastly, the market knowledge gained from an economics degree helps you understand the broader economic context in which businesses operate. This includes grasping the interconnectedness of global markets and the influence of international trade and finance. Such insights not only enrich your professional expertise but also enable you to contribute more effectively to discussions on economic policy and business strategy. By understanding the intricate web of economic interactions, you become better equipped to navigate the complexities of the market and make decisions that drive sustainable growth and success.
Skills:
The typical skills associated with completed a BS in Economics are the following:
Analytical thinking
Quantitative analysis
Critical thinking
Problem-solving
Data analysis and interpretation
Statistical and econometric techniques
Understanding economic theories and principles
Research skills
Report writing
Policy analysis
Economic forecasting
Mathematical modeling
Communication skills
Presentation skills
Decision-making skills
Financial literacy
Market analysis
Knowledge of microeconomics and macroeconomics
Time management
Project management
Teamwork and collaboration
Understanding of international economics
Public speaking
Strategic thinking
Business acumen
Some R, Python, and maybe even data visualization.
Systems thinking (helps you think in models)
From my own experience, studying economics specifically helps with strategizing as all strategy is about deciding what to do with scarce resources that have alternative uses — whether that be time, money, assets, energy, labor, etc. This is done by assessing your economic environment and then your economic assets and the solutions naturally occur to you.
In addition, it helps you understand power laws and exponential growth quite well, which aides in many fields.
Academic & Career Opportunities:
A Bachelor of Science in Economics opens numerous doors in both academic and professional realms.
Academics:
An economics degree is an excellent foundation for pursuing advanced studies. Graduate programs such as a master's or PhD in economics, law school, MBA programs, or a Master's in Data Science become accessible with a strong undergraduate background in economics. These programs value the analytical and quantitative skills honed during your economics studies.
Career:
Professionally, the degree offers a wide array of opportunities. Fields like finance, consulting, government, academia, and international organizations value the skills and insights an economics degree provides. Roles in these areas often demand a solid grasp of data analysis, economic theory, and strategic thinking, making economics graduates well-suited for these positions.
To truly benefit from these opportunities, it is crucial to deeply understand the material and develop essential skills such as data analysis and proficiency in tools like Excel, R-Programming, and/or Python. Half-hearted efforts won't yield the same academic or career results; commitment and competence are key to unlocking the full potential of an economics degree.
Enhanced Investment Knowledge
Investments are like organisms in an environment; their success hinges on their fitness within the economic landscape (a subset of the biological landscape that follows much of natural selection and evolution). An economics degree provides the foundational knowledge necessary for smarter investing by helping you understand the intricate workings of the monetary system, the nature of inflation, and the complexities of commodities, financial markets, and geopolitics. It forms the backbone of investing and provides you the economic foundations for informed investing. Here's a very brief overview of how:
Understanding the Monetary System: An economics background equips you with the knowledge of how the supply of money impacts the economy and how inflation can be driven by an oversupply of money. Fundamentally, inflation is determined by the set of all money (the money supply) competing for the set of all assets. This insight helps in predicting inflationary trends and their effects on investments.
Types of Inflation: By understanding the various types of inflation, such as monetary, cost-push, demand-pull, and sellers inflation (price gouging) you can better analyze market conditions and avoid oversimplifying economic situations. This enables you to identify investment niches that might be less affected by inflationary pressures.
Commodities and Production: Knowing how raw materials transform into end products allows you to foresee potential disruptions in industries due to commodity shortages. This understanding is crucial for evaluating the stability and growth potential of your investments (but also requires understanding of geographies and the originations of commodities).
Geopolitical Influences: With a grasp of the geographical production and distribution of goods, you can predict how geopolitical tensions might disrupt supply chains and affect your investments. This foresight helps in adjusting your portfolio to mitigate risks associated with geopolitical instability.
Energy Inflation: Understanding the special nature of energy inflation is vital since energy is a fundamental input in every industry. By tracking energy prices and their ripple effects, you can make more informed decisions about industries heavily reliant on energy - or those who aren’t heavily reliant may have increased profitability when other do not.
Technology Diffusion: Economics teaches you how new technologies spread within a market. This knowledge helps you anticipate the adoption curve of innovative products and services, allowing you to model and (hopefully) invest early in promising technologies.
Policy Impacts: An economics degree helps you understand how various policies at international, national, regional, state, and local levels can influence your investments. This comprehensive perspective enables you to adjust your strategies based on anticipated policy changes.
Practical Application: Good investors & traders follow economic indicators like the Producer Price Index (PPI) to determine producers inflation, wholesale and retail inventories to determine at what rate goods are flowing (and if the supply chain can handle it), Consumer Price Index (CPI) to determine future consumer spending habits, consumer sentiment surveys to see how consumers are thinking, and labor market data to determine what the relative supply and cost of labor are for the investments you are in, and many more. A solid understanding of these indicators allows you to track and interpret economic trends, leading to enhanced investment strategies.
While investing is inherently complex, a basic understanding of economics provides a crucial foundation for success. This knowledge empowers you to make more informed decisions, anticipate market shifts, and ultimately achieve better investment outcomes.
Disclaimer: Investing is incredibly complex, and a basic understanding of the economy is just the beginning for anyone wishing to have a successful career in it.
Cons:
While there are many professional and personal benefits to studying economics, it’s important to acknowledge that the field, like any other, has its downsides. Below, I’ll share a few cons based on my own experience.
Accounting and Finance Gaps:
Surprisingly, economics students often graduate without a firm understanding of accounting and finance—the bread and butter of many business roles. It’s ironic because economics overlaps with finance in many areas, but the degree itself typically doesn't focus on the technical skills you would acquire in a finance or accounting program. Ideally, a good understanding of accounting and finance would precede or at least accompany your economics education, as both of these disciplines are crucial for truly understanding and implementing economic principles in a professional setting.
Lack of Immediate Marketable Skills:
One of the main challenges graduates face is that an economics degree, in its pure form, may not provide you with immediately marketable skills. Unless you've specialized in areas like data science or gone particularly heavy on math, it can be difficult to convince employers of your practical utility right out of school. Unlike accounting, finance, or engineering degrees, which often have clear, job-specific training embedded within them, economics tends to be more abstract. You learn about systems, behaviors, and models but translating that into a practical skillset requires additional effort.
This means that graduates often need to pursue further qualifications, such as certificates in finance, data analysis, or even software development, to make their profiles more attractive to employers. Without these, it can be tough to stand out in today’s job market.
The Abstraction Problem:
Economics is often taught in an abstract manner. Many of the lessons and concepts are theoretical and require a lot of extrapolation to apply them in the real world. The issue here is that, while this theoretical approach is excellent for fostering critical thinking, it can sometimes feel disconnected from practical, hands-on problem-solving. This can leave graduates feeling underprepared when they’re thrust into roles that demand immediate real-world impact.
Economics doesn't always teach you how to directly apply what you know in concrete, business-ready ways. You might be proficient in discussing models or policies but find it difficult to execute on day-to-day tasks in a new role, especially in fast-paced or highly technical industries.
Prescriptive or Descriptive, But Not Always Creative:
Economics primarily teaches you how to describe the world or prescribe solutions based on data — but not to implement the solutions. It’s about positive (what is) and normative (what should be) approaches to understanding economic reality. But it falls short when it comes to fostering creativity and innovation. In the entrepreneurial space, economics doesn’t teach you how to create something new; instead, it shows you how things already work. You may find that you're boxed into viewing the world in descriptive or prescriptive terms, rather than seeing it as something that can be molded and innovated upon.
This focus can limit your ability to think outside the box, particularly in fields where creativity is paramount. Entrepreneurs need to create their own economic reality, not just observe or analyze existing structures. An economics degree, while it teaches excellent critical thinking and analytical skills, doesn’t always equip you with the mindset needed for creative problem-solving or innovative business creation.
Your life is fundamentally a creation. So ultimately, it’s about what you create with it, not what you are given for it. This world is here for your creating, you CAN create it, you CAN create your own reality, and you CAN create economic realities. You don’t have to be relegated to just describing them. The moment you limit yourself to descriptions, the world may shift yet again. Instead, embrace the power to innovate, adapt, and actively shape the economic landscape around you.
Specialization vs. Generalization:
An economics degree provides a broad foundation, which is both a blessing and a curse. While this general knowledge can open doors to a wide array of fields, many specialized roles require further training. For example, becoming a financial analyst or policy advisor often requires additional certifications or education in finance, public policy, or related fields.
Economics can sometimes leave students with a false sense of readiness to tackle highly specialized tasks or industries. Some even might feel equipped to reshape global economic policy, but if you haven’t run a successful organization or project, that confidence might be misplaced. The degree, in many cases, requires a lot of additional work to truly prepare you for niche roles that require specific skill sets.
Overconfidence and the Reality Check:
A common pitfall for economics graduates is the belief that they are ready to restructure the global economy after a few semesters of theory. The danger here is overconfidence. Economics students can leave university with an inflated sense of their ability to analyze and solve large-scale problems without having experienced the complexities and unpredictability of the real world. There’s a big difference between knowing economic theory and being able to apply it effectively in complex, real-world scenarios where human behavior, market volatility, and political dynamics come into play.
A successful career requires more than just knowing how systems should work in theory—you need hands-on experience, adaptability, and the creativity (and credibility) to design new solutions rather than merely describe existing ones. Unfortunately, this isn’t always emphasized enough within traditional economics curricula.
The Skills in Action:
Now that we’ve explored both the benefits and some of the challenges of pursuing an economics degree, I’d like to offer a real-world example of how these analytical skills can be applied. In a separate post, I’ve analyzed inflation trends and provided insights into when interest rates might be lowered. You can check out that post here [upcoming] for a deeper dive into how an economics background can be used to make informed predictions about major economic shifts.
Conclusion:
In conclusion, earning a degree in economics is a journey that offers both substantial benefits and a few notable challenges. It equips you with critical thinking skills, a broadened worldview, and a deep understanding of market dynamics, all of which are invaluable in today’s complex, interconnected world. The analytical tools and perspectives you gain can open doors to diverse career opportunities and provide a strong foundation for further academic pursuits or professional growth.
However, it’s important to recognize that the value of this degree extends beyond just the knowledge it imparts; it lies in how you choose to apply that knowledge. Whether it’s through strategic decision-making, insightful policy analysis, or innovative problem-solving, the true power of an economics education comes from your ability to use it creatively and effectively in the real world.
At the same time, be mindful of the degree’s limitations. Economics can sometimes feel abstract, requiring additional skills and experiences to fully realize its potential in a professional setting. But with dedication and a willingness to continually learn and adapt, the possibilities are endless.
Ultimately, the professional benefits of an economics degree are what you make of them. With the right mindset and approach, this field of study can be a powerful tool to not only navigate but also shape the economic realities around you. So, whether you’re just starting your journey or are already well on your way, remember that the knowledge and skills you gain are just the beginning. The rest is up to you.
Thank you for reading, and I invite you to share your thoughts, experiences, and perspectives in the comments below. Let’s continue to learn from each other and grow together.