What is economics?
Understanding the discipline
- Why are some countries rich and some countries poor?
- Why do women earn less than men?
- How can data help us understand the world?
- Why do we ignore information that could help us make better decisions?
- What causes recessions?
Economics can help us answer these questions. Below, we’ve provided links to short articles that illustrate what economics is and how it connects to our everyday lives.
Economics can be defined in a few different ways. It’s the study of scarcity, the study of how people use resources and respond to incentives, or the study of decision-making. It often involves topics like wealth and finance, but it’s not all about money. Economics is a broad discipline that helps us understand historical trends, interpret today’s headlines, and make predictions about the coming years.
Economics ranges from the very small to the very large. The study of individual decisions is called microeconomics. The study of the economy as a whole is called macroeconomics. A microeconomist might focus on families’ medical debt, whereas a macroeconomist might focus on sovereign debt.
What do economists do?
Economists have all kinds of jobs, such as professors, government advisors, consultants, and private sector employees. Using theoretical models or empirical data, they evaluate programs, study human behavior, and explain social phenomena. And, their contributions inform everything from public policy to household decisions.
Economics intersects many disciplines. Its applications include health, gender, the environment, education, and immigration. You can check out the field’s classification system (called JEL codes) for more topics that economists study.
Why should I care about economics?
Economics affects everyone’s lives. Learning about economic concepts can help you to understand the news, make financial decisions, shape public policy, and see the world in a new way.
If you are a student, you might be wondering about how much economists earn or how to apply to graduate school in economics. We have resources on everything from learning more about economics to preparing for a career in economics.
If you are an educator, you might be looking for ways to make economics more exciting in the classroom, get complimentary journal access for high school students, or incorporate real-world examples of economics concepts into lesson plans.
Or, you might just want to learn more; our Research Highlight series is a great place to start.
No matter why you are interested in economics, the American Economic Association is here to help. We are dedicated to helping the public discover the field of economics. Browse our resources pages to learn more, and make sure to follow us on Facebook (AEAjournals) and Twitter (@AEAjournals).
A few economists at the 2019 AEA Annual Meeting offered their thoughts about the most urgent question that economists are tackling today. The responses ranged far and wide, but a theme emerged: inequality.
Much more than finance, banking, business and government, a degree in economics is useful to all individuals and can lead to many interesting career choices. These four diverse individuals offer their insights on how a background in economics can be a tool for solving very human problems.
Economists can study a wide variety of topics. The following videos highlight some of the ways economists use data to explore everything from college reputations in Colombia to education in the Philippines.
Check out the latest research appearing in AEA journals
Find places to learn more about economics
What careers follow after an economics degree?
The AEA offers complimentary access to all our journals for high school students and teachers.
Average Salary of an Economics PhD
The Doctor of Philosophy (PhD) is the terminal degree in economics. Earning the degree requires years of study and culminates in the completion and defense of a dissertation of economic research. Many recipients of the PhD pursue academic careers as professors of economics, business and related fields. Others pursue careers in government or consulting. The average salary of a PhD in economics depends on the selected career path.
Academic Economists at Doctoral Institutions
Most four-year colleges and universities require a PhD for employment as a faculty member in economics. In addition, some PhD economists hold faculty positions in schools of business, law and public affairs or public policy. Salaries for economists in academia vary by whether an economist is on the faculty of a university that grants PhDs or only undergraduate and master’s degrees. The American Economic Association reported in 2007 that senior assistant professors at PhD-granting institutions earn an average of nearly $96,000 a year. Professors who earn tenure can expect to earn even more. The AEA reported that salaries for tenured associate professors average $128,600 a year, while full professors’ annual salaries average $204,800 a year.
Other Academic Economists
Economics PhDs who find employment as faculty members at universities in which the master’s is the terminal degree earn less than their counterparts at PhD-granting institutions. The AEA reported in 2007 that salaries for senior assistant professors average $80,167 a year. Tenured associate professors receive a small boost, with their salaries averaging $82,333. Full professors at colleges and universities that grant only bachelor’s and master’s degrees earn average annual salaries of $97,500, according to the AEA.
PhD economists with strong public policy interests find rewarding careers in government, especially at the federal level. The federal government has jobs for economists in many agencies and departments. These include the Federal Reserve Board and its regional banks, the U.S. Department of State, the Central Intelligence Agency and the U.S. Department of Labor. A PhD in economics can begin a career on GS-12 of the federal government’s pay scale, according to the American Economic Association. Starting salaries on the GS-12 grade range from $60,274 to $78,355 a year, according to the U.S. Office of Personnel Management’s 2011 pay scale for federal employees.
Career opportunities for PhD economists are not limited to civil service and academia. Others enter the private sector, working in consulting, financial markets, banking, manufacturing and other business sectors. The National Association of Business Economics’ 2010 salary survey reported that its members with doctoral degrees earned an average of $150,000 a year, well above the $120,000 median for all NABE members, regardless of degree. In addition, the average starting salary for a PhD was $85,000. Highlights of the NABE report indicated that respondents to the survey included government economists as well as those in business, finance and consulting.
- American Economic Association: Careers
- U.S. Office of Personnel Management: 2011 Salary Scale
- National Association for Business Economics: Business Economics Career Center
The Ph.D. program is a full time program leading to a Doctoral Degree in Economics. Students specialize in various fields within Economics by enrolling in field courses and attending field specific lunches and seminars. Students gain economic breadth by taking additional distribution courses outside of their selected fields of interest.
Students are required to complete 1 quarter of teaching experience. Teaching experience includes teaching assistantships within the Economics department or another department .
Students apply for candidacy to the PhD program by the start of their third year in the program.
The University Orals Examination is typically taken in the final year of the program.
University’s residency requirement
135 units of full-tuition residency are required for PhD students. After that, a student should have completed all course work and must request Terminal Graduate Registration (TGR) status.
Department degree requirements and student checklist
1. Core Course requirement
Required: Core Microeconomics (202-203-204) Core Macroeconomics (210-211-212) Econometrics (270-271-272). The Business School graduate microeconomics class series may be substituted for the Econ Micro Core. Students wishing to waive out of any of the first year core, based on previous coverage of at least 90% of the material, must submit a waiver request to the DGS at least two weeks prior to the start of the quarter. A separate waiver request must be submitted for each course you are requesting to waive. The waiver request must include a transcript and a syllabus from the prior course(s) taken.
2. Field Requirements
Required: Two of the Following Fields Chosen as Major Fields (click on link for field course requirements). Field sequences must be passed with an overall grade average of B or better. Individual courses require a letter grade of B- or better to pass unless otherwise noted.
Research fields and field requirements:
- Behavioral & Experimental
- Development Economics
- Economic History
- Environmental, Resource and Energy Economics
- Industrial Organization
- International Trade
- International Finance
- Labor Economics
- Market Design
- Microeconomic Theory
- Public Economics
Required: Four other graduate-level courses must be completed. One of these must be from the area of economic history (unless that field has already been selected above). These courses must be distributed in such a way that at least two fields not selected above are represented. Distribution courses must be passed with a grade of B or better.
4. Field Seminars/Workshops
Required: Three quarters of two different field seminars or six quarters of the same field seminar from the list below.
|310: Macroeconomics||Faculty Coordinator: Pablo Kurlat|
|315: Development||Faculty Coordinator: Pascaline Dupas|
|325: Economic History||Faculty Coordinator: Ran Abramitzky|
|335: Experimental/Behavioral||Faculty Coordinator: Doug Bernheim|
|341: Public/Environmental||Faculty Coordinator: Caroline Hoxby/Larry Goulder|
|345: Labor||Faculty Coordinator: Nick Bloom|
|355: Industrial Organization||Faculty Coordinator: Liran Einav|
|365: International Trade||Faculty Coordinator: Kyle Bagwell|
|370: Econometrics||Faculty Coordinator: Han Hong|
|391: Microeconomic Theory||Faculty Coordinator: Ilya Segal|
- First year: core courses
- Second year: field and distribution requirements, candidacy paper
- Third year: third year seminar and field seminars, admission to candidacy, thesis advisor
- Fourth year: thesis committee, TGR status, oral exams
The economics profession
Becoming a professor, researcher, or educator
The Doctor of Philosophy degree (PhD) in economics is necessary for a faculty position in economics at most four-year colleges in the US. A masters degree is the typical credential for faculty at two-year colleges. Although some students complete masters programs before entering PhD programs, many go directly from BA programs into PhD programs. Completion of a PhD requires about six years of full-time study. Holders of the Ph.D. often also choose research careers outside of academics, including roles at the Federal Reserve, international agencies, and government policy and evaluation departments as well as in private banks, investment houses, and other for-profit ventures.
There are about 100 universities in the US who together produce about 1,000 new PhDs each year. About half of the graduates are US citizens and the other half come from abroad. [John J. Siegfried and Wendy A. Stock, “The Undergraduate Origins of Ph. D. Economists,”Working Paper, May 2006.] Although the number of economics majors has grown significantly over the decades, the number of new PhDs who intend to pursue careers in the US has declined. As a consequence, employment opportunities for PhD economists in academia should be excellent in the decades ahead.
The Commission on Professionals in Science Technology (mentioned above, page 8) reports starting salaries for assistant professors by field. At $78,567, economics is well above the average of $65,205 of all fields in 2006-07. The table below reports average salary offers to newly hired economists at each academic rank by type of institution.
Average Academic Salary Offers for Senior Level Economists by Rank and Type of Institution, 2006-07
|Rank of Academic Economist||All PhD Granting Institutions||BA & MA Institutions|
|Senior Assistant Professor||$95,995||$80,167|
|Associate Professor with Tenure||$128,600||$82,333|
Source: Nathan E. Bell, Nicole M. Di Fabio, and Lisa M. Frehill, “Salaries of Scientists, Engineers and Technicians: A Summary of Salary Surveys.” The Commission on Professionals in Science and Technology (CPST: Washington, DC 2007) selected curricula from page 268.
Academic economists at PhD granting institutions play leading roles in the development of new ideas in economics and publish their work in journals like those published by the AEA. As teachers, economists play an important role in supporting the undergraduate major in economics and the various graduate programs.
A number of PhD economists hold faculty positions in MBA programs, law and medical schools, public policy programs, and in a number of other fields. Economists on the faculty of leading professional schools often earn premium salaries.
A number of for-profit and not-for-profit enterprises hire research economists as do many government and international agencies. The National Association of Business Economics provides information about business careers for economists. The career sites for government and not-for-profits mentioned above also point to opportunities for researchers.
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