Some people may find economics not very exciting. For others, it's an opportunity to jump into numbers as an exciting career field. Working in economics means diving into data, trends, and policies to offer smart insights and suggestions. Economists can focus on different areas and find jobs in various places like government, schools, companies, and research groups. In this article, we'll look at the different career options, what a workday looks like, and what the outlook of the profession of economist looks like.
Key Takeaways
- Economists analyze data and trends to provide insights and recommendations.
- They can specialize in various areas and work in diverse sectors such as the private sector, public sector, or universities.
- To become an economist, be prepared to work on your presentation skills and data analytics capabilities.
- Economists can play a key role in shaping a more sustainable and equitable economic future.
A Day In The Life Of An Economist
Understanding Economics
Before we look at what economists do, let's get an understanding of what economics is. Economics is the social science that examines how individuals, businesses, and governments make decisions. It's usually the thought that goes in about the allocation of scarce resources to satisfy general wants and needs.
Economics is like a giant puzzle that seeks to understand how people navigate a world with limited time, money, and resources. At its core, economics revolves around the concept of scarcity which means there's never enough of everything to go around. This scarcity forces us to make choices about what to produce, how to produce it, and who gets to consume it. Economists study these choices through various lenses (which we'll talk about in the next section).
Economics also explores the interplay of supply and demand Prices, a fundamental aspect of economics, act as signals that convey information about goods and services. However, economics doesn't just stop at analyzing how things are; it also delves into how they ought to be. This aspect involves discussions about fairness, equity, and the role of government should play in broad decision-making. In essence, economics is a powerful tool for understanding the dynamics of the world's markets and shaping policies to enhance the quality of life for society.
Types of Economists
To understand what it looks like to be an economist, you must first understand the main types of economists. We'll talk more broadly about the overlap across these three types later, but keep in mind that your day-to-day tasks, work environment, and underlying data will widely vary based on what type of economist you become.
First, public sector economists analyze policies, evaluate government budgets, and collect data to support policymakers at various levels of government. They're the people that crunch the numbers to better understand how a tax break or monetary policy may impact the public. Public sector jobs tend to have higher chances to address social issues as issues tend to deal directly with taxpayer dollars.
Next, academic economists balance teaching and research. The perks of being an academic economist include freedom to do research, though financial support for research might be limited. Academic economists often work at the university level, and some positions may call for a Ph.D. in economics.
Last, private sector economists work in banks, investment firms, and corporations, analyzing economic trends and legislation's impact. Say you're interested in better understanding how the latest iPhone may be received by consumers if it priced $100 higher or $200 higher than the latest release. An economist that works for Apple may decipher macroeconomic information to better understand how a consumer may react to a higher or lower price.
Not sure if the role of economist is for you? The Bureau of Labor Statistics states that actuaries, mathematicians, research analysts, or data scientists may be similar professions.
What Economists Do
Economists are the folks who roll up their sleeves and dive deep into the economic complexities. They research a variety of economic topics, from education and the job market to global trade and more. They are often conducting surveys and gathering data, which they then computer off of using mathematical models and statistical software. This number-crunching helps them figure out trends, like what's happening in the stock market or where job opportunities are headed.
Economists don't stop there: they also offer valuable advice to whomever they report to. For public economists, these are policymakers. For private economists, this may be a company. Economists present their research in easy-to-understand formats, so be prepared to make tables, graphs, and articles.
You'll find economists working in all sorts of industries, from businesses to healthcare and environmental agencies. Some look into how much it costs to make a product or provide healthcare, while others focus on employment rates, inflation, or the ups and downs of the business world. In the public sector, they're the ones collecting and analyzing data about things like job numbers manufacturing progress.
Where Economists Work
In 2022, there were approximately 17,600 jobs for economists. The largest employers of economists were the federal government (excluding the postal service), accounting for 27% of the economist workforce. They were also in demand in management, scientific, and technical consulting services, making up 20% of the total positions. Additionally, economists found employment in scientific research and development services (11%), state government (excluding education and hospitals) (10%), and local government (excluding education and hospitals) (7%).
Economists typically work in office settings, where they conduct their research and analysis. While they often work independently, they also collaborate with experts such as data scientists and statisticians to enhance their work. On occasion, economists may need to travel to attend conferences and stay updated with the latest developments in their field. Regarding work schedules, most economists work full time, and some may put in more than 40 hours per week.
As of May 2022, most economist jobs work in Washington D.C. States with higher economist employment levels also include California, Maryland, New York, and Virginia.
Economists in Academia
To become a professor, researcher, or educator in the field of economics, a Doctor of Philosophy degree (PhD) is typically required for faculty positions at most four-year colleges in the US. However, for faculty roles at two-year colleges, a master's degree is the common credential. Many students directly pursue a PhD after completing their Bachelor's degree, which typically involves about six years of full-time study.
The American Economic Association reports that in 2022-2023, the average starting salary for assistant professors at PhD-granting institutions was $149,946. Salaries vary by academic rank and institution type, with PhD-granting institutions generally offering higher salaries. Academic economists at these institutions are often at the forefront of developing new economic ideas and publish their research in prestigious journals.
PhD economists can also hold faculty positions in various fields, such as MBA programs, law and medical schools, and public policy programs. Besides academia, many government agencies, international organizations, and both for-profit and not-for-profit enterprises hire research economists for more ad hoc or niche short-term opportunities.
How to Become an Economist
Sold on the idea of becoming an economist? There's a lot of work to make that happen, and your experience in school may or may overlap with what your experience will be like in the actual profession.
As talked about above, you'll typically need at least a master's degree, although some positions, especially in government, might accept a bachelor's degree. Many economists pursue a Ph.D. for higher-level roles or to become a professor. If you're aiming for an advanced degree in economics, having undergraduate coursework in subjects like economics or mathematics can be beneficial.
Analytical skills are essential for economists as they review data and identify patterns to make logical conclusions. Communication skills matter as well because economists need to explain their findings through presentations and written reports, often to diverse audiences. Economists may also work with a variety of individuals ranging from non-financially savvy leaders to other economists, so getting practice having discourse with many types of people is valuable.
Computer skills are handy, as economists often use statistical analysis software. Critical thinking is a must for tackling complex problems, and math skills, including calculus and linear algebra which come into play when developing models and analyses. A degree in economics may entail technical computational classes potentially involving macroeconomics, microeconomics, econometrics, and quantitative economics.
What Data and Tools Do Economists Use in Their Work?
Economists rely on a wide range of data sources including government statistics, surveys, and financial reports. Note that some of this data is qualitative reports from market infrastructure, while others relay market sentiment from people. Economists then feed this info into statistical software and economic models to analyze data, identify patterns, and make projections. These projections then formulate what they think is the best plan.
What Are the Challenges and Opportunities in an Economist's Career?
Economists may need to get comfortable working with data limitations, such as not having enough information or not having a particular set of data on hand. In addition, economists often need to forecast the future which can be very unclear and unpredictable. Depending on what industry they work in, an economist may also experience headwinds due to politics or opposing views when it comes to proposing different monetary, fiscal, or strategic policies.
What Is the Future Outlook for the Field of Economics?
The field of economics continues to evolve. There has been substantial economic impacts and responses in light of COVID-19. Economists can play an important role in addressing repercussions from the pandemic that may or may not have long-lasting impacts.
Economics are also at an interesting intersection regarding technology. As the evolution of AI and large language models develops, there is the potential for wide-scale economic repercussions that impact broad labor markets. The need for economic expertise is may persist as society faces new economic dynamics and complexities.
The Bottom Line
Working in economics involves analyzing economic data, trends, and policies to provide valuable insights and make informed recommendations. You may work a 40-hour week job, though this can highly vary depending on if you go into the public, private, or educational sector. As you consider a role as an economist, be mindful of your ability to process data, draw conclusions, and make presentations to drive decision-making.
