Economists study how society distributes scarce resources, such as land, labor, raw materials, and machinery, to produce goods and services. They conduct research, collect and analyze data, monitor economic trends, and develop forecasts. They research issues such as energy costs, inflation, interest rates, exchange rates, business cycles, taxes, or employment levels.
Economists devise methods and procedures for obtaining the data they need. For example, sampling techniques may be used to conduct a survey, and various mathematical modeling techniques may be used to develop forecasts. Preparing reports, including tables and charts, on research results is an important part of an economist's job. Presenting economic and statistical concepts in a clear and meaningful way is particularly important for economists whose research is directed toward making policies for an organization. Some economists also might perform economic analysis for the media.
Many economists specialize in a particular area of economics, although general knowledge of basic economic principles is useful in each area. Microeconomists study the supply and demand decisions of individuals and firms, such as how profits can be maximized and how much of a good or service consumers will demand at a certain price. Industrial economists or organizational economists study the market structure of particular industries in terms of the number of competitors within those industries and examine the market decisions of competitive firms and monopolies. These economists also may be concerned with antitrust policy and its impact on market structure. Macroeconomists study historical trends in the whole economy and forecast future trends in areas such as unemployment, inflation, economic growth, productivity, and investment. Closely related to macroeconomists are monetary economists or financial economists, who study the money and banking system and the effects of changing interest rates. International economists study international financial markets, exchange rates, and the effects of various trade policies such as tariffs. Labor economists or demographic economists study the supply and demand for labor and the determination of wages. These economists also try to explain the reasons for unemployment and the effects of changing demographic trends, such as an aging population and increasing immigration, on labor markets. Public finance economists are involved primarily in studying the role of the government in the economy and the effects of tax cuts, budget deficits, and welfare policies. Econometricians investigate all areas of economics and use mathematical techniques such as calculus, game theory, and regression analysis to formulate economic models that help to explain economic relationships and that are used to develop forecasts related to the nature and length of business cycles, the effects of a specific rate of inflation on the economy, the effects of tax legislation on unemployment levels, and other economic phenomena. Many economists have applied these fundamental areas of economics to specific applications such as health, education, agriculture, urban and regional economics, law, history, energy, and the environment.
Most economists are concerned with practical applications of economic policy and work for a variety of organizations. Economists working for corporations are involved primarily in microeconomic issues, such as forecasting consumer demand and sales of the firm's products. Some analyze their competitors' growth and market share and advise their company on how to handle the competition. Others monitor legislation passed by Congress, such as environmental and worker safety regulations, and assess its impact on their business. Corporations with many international branches or subsidiaries might employ economists to monitor the economic situations in countries where they do business or to provide a risk assessment of a country into which the company might expand.
Economists working in economic consulting or research firms may perform the same tasks as economists working for corporations. Economists in consulting firms also perform much of the macroeconomic analysis and forecasting that is conducted in the United States. These economists collect data on various indicators, maintain databases, analyze historical trends, and develop models to forecast growth, inflation, unemployment, or interest rates. Their analyses and forecasts are frequently published in newspapers and journal articles.
Another large employer of economists is the government. Economists in the Federal Government administer most of the surveys and collect the majority of the economic data characterizing the United States. For example, economists in the U.S. Department of Commerce collect and analyze data on the production, distribution, and consumption of commodities produced in the United States and overseas, while economists employed by the U.S. Department of Labor collect and analyze data on the domestic economy, including data on prices, wages, employment, productivity, and safety and health. Economists who work for government agencies also assess economic conditions in the United States or abroad in order to estimate the economic effects of specific changes in legislation or public policy. Government economists advise policy makers in areas such as telecommunications deregulation, Social Security revamping, the effects of tax cuts on the budget deficit, and the effectiveness of imposing tariffs on imported steel. An economist working in State or local government might analyze data on the growth of school-age or prison populations, and on employment and unemployment rates, in order to project future spending needs.
Economists have structured work schedules. They often work alone, writing reports, preparing statistical charts, and using computers, but they also may be an integral part of a research team. Most work under pressure of deadlines and tight schedules, which may require overtime. Their routine may be interrupted by special requests for data and by the need to attend meetings or conferences. Frequent travel may be necessary.
A master's or Ph.D. degree in economics is required for many private-sector economist jobs and for advancement to more responsible positions. Economics includes numerous specialties at the graduate level, such as advanced economic theory, econometrics, international economics, and labor economics. Students should select graduate schools that are strong in specialties in which they are interested. Undergraduate economics majors can choose from a variety of courses, ranging from microeconomics, macroeconomics, and econometrics to more philosophical courses, such as the history of economic thought. Because of the importance of quantitative skills to economists, courses in mathematics, statistics, econometrics, sampling theory and survey design, and computer science are extremely helpful. Some schools help graduate students find internships or part-time employment in government agencies, economic consulting or research firms, or financial institutions prior to graduation.
In the Federal Government, candidates for entry-level economist positions must have a bachelor's degree with a minimum of 21 semester hours of economics and 3 hours of statistics, accounting, or calculus.
Whether working in government, industry, research organizations, or consulting firms, economists with a bachelor's degree usually qualify for most entry-level positions as a research assistant, for administrative or management trainee positions, or for various sales jobs. A master's degree usually is required to qualify for more responsible research and administrative positions. Many businesses, research and consulting firms, and government agencies seek individuals who have strong computer and quantitative skills and can perform complex research. A Ph.D. is necessary for top economist positions in many organizations. Many corporation and government executives have a strong background in economics.
A master's degree usually is the minimum requirement for a job as an instructor in a junior or community college. In most colleges and universities, however, a Ph.D. is necessary for appointment as an instructor. A Ph.D. and extensive publications in academic journals are required for a professorship, tenure, and promotion.
Aspiring economists should gain experience gathering and analyzing data, conducting interviews or surveys, and writing reports on their findings while in college. This experience can prove invaluable later in obtaining a full-time position in the field, because much of the economist's work, especially in the beginning, may center on these duties. With experience, economists eventually are assigned their own research projects. Related job experience, such as work as a stock or bond trader, might be advantageous.
Those considering careers as economists should be able to pay attention to details, because much time is spent on precise data analysis. Patience and persistence are necessary qualities, given that economists must spend long hours on independent study and problem solving. Good communication skills also are useful, as economists must be able to present their findings, both orally and in writing, in a clear, concise manner.
Economists held about 13,000 jobs in 2004. Government employed 58 percent of economists, in a wide range of government agencies, with 34 percent in Federal government and 24 percent in State and local government. The U.S. Departments of Labor, Agriculture, and State are the largest Federal employers of economists. The remaining jobs were spread throughout private industry, particularly in scientific research and development services and management, scientific, and technical consulting services. A number of economists combine a full-time job in government, academia, or business with part-time or consulting work in another setting.
Employment of economists is concentrated in large cities. Some work abroad for companies with major international operations, for U.S. Government agencies, and for international organizations, such as the World Bank, International Monetary Fund, and United Nations.
In addition to the previously mentioned jobs, economists hold faculty positions in colleges and universities. Economics faculties have flexible work schedules and may divide their time among teaching, research, consulting, and administration.
Employment of economists is expected to grow more slowly than average for all occupations through 2014. Employment growth should be the fastest in private industry, especially in management, scientific, and technical consulting services. Rising demand for economic analysis in virtually every industry should stem from the growing complexity of the global economy, the effects of competition on businesses, and increased reliance on quantitative methods for analyzing and forecasting business, sales, and other economic trends. Some corporations choose to hire economic consultants to fill these needs, rather than keeping an economist on staff. This practice should result in more economists being employed in consulting services. However, job growth will be limited as firms increasingly employ workers to perform more specialized tasks with titles that reflect the specific duties of the job instead of the general title of economist. In addition, few new jobs are expected in government, but the need to replace experienced workers who transfer to other occupations or who retire or leave the labor force for other reasons will lead to job openings for economists across all industries in which they are employed.
Individuals with a background in economics should have job opportunities, although some of these opportunities will be in related occupations. As firms increasingly employ workers to perform more specialized tasks, the best opportunities for individuals with backgrounds in economics are expected to be in positions that have titles other than economist. Some examples of job titles often held by those with an economics background are financial analyst, market analyst, public policy consultant, researcher or research assistant, and econometrician.
A master's or Ph.D. degree, coupled with a strong background in economic theory, mathematics, statistics, and econometrics, provides the basis for acquiring any specialty within the economics field. Economists who are skilled in quantitative techniques and their application to economic modeling and forecasting, and who also have good communications skills, should have the best job opportunities. Like those in many other disciplines, however, Ph.D. holders are likely to face keen competition for tenured teaching positions in colleges and universities.
Bachelor's degree holders may face competition for the limited number of economist positions for which they qualify. However, they will qualify for a number of other positions in which they can take advantage of their economic knowledge by conducting research, developing surveys, or analyzing data. Many graduates with bachelor's degrees will find jobs in industry and business as management or sales trainees or as administrative assistants. Bachelor's degree holders with good quantitative skills and a strong background in mathematics, statistics, survey design, and computer science also may be hired by private firms as researchers. Some will find jobs in government.
Candidates who meet State certification requirements may become high school economics teachers. The demand for secondary school economics teachers is expected to grow, as economics becomes an increasingly important and popular course.
Median annual wage and salary earnings of economists were $72,780 in May 2004. The middle 50 percent earned between $53,650 and $96,240. The lowest 10 percent earned less than $41,040, and the highest 10 percent earned more than $129,170.
The Federal Government recognizes education and experience in certifying applicants for entry-level positions. The starting salary for economists having a bachelor's degree was about $24,667 a year in 2005; however, those with superior academic records could begin at $30,567. Those having a master's degree could qualify for positions at an annual salary of $37,390. Those with a Ph.D. could begin at $45,239, while some individuals with experience and an advanced degree could start at $54,221. Starting salaries were slightly higher in selected geographical areas where the prevailing local pay was higher. The average annual salary for economists employed by the Federal Government was $89,441 a year in 2005.