|July 5, 2005
The Hot Major
By JESSICA E. VASCELLARO
Staff Reporter of THE WALL STREET JOURNAL
July 5, 2005
What's your major? Around the world, college undergraduates'
time-honored question is increasingly drawing the same answer: economics.
U.S. colleges and universities awarded 16,141 degrees to economics
majors in the 2003-2004 academic year, up nearly 40% from five years
earlier, according to John J. Siegfried, an economics professor at
Vanderbilt University in Nashville, Tenn., who tracks 272 colleges and
universities around the country for the Journal of Economic Education.
Since the mid-1990s, the number of students majoring in economics has
been rising, while the number majoring in political science and
government has declined and the number majoring in history and sociology
has barely grown, according to the government's National Center for
"There has been a clear explosion of economics as a major," says Mark
Gertler, chairman of New York University's economics department.
The number of students majoring in economics has been rising even faster
at top colleges. At New York University, for example, the number of econ
majors has more than doubled in the past 10 years. At nearly 800, it is
now the most popular major.
Economics also is the most popular major at Harvard University in
Cambridge, Mass., where 964 students majored in the subject in 2005. The
number of econ majors at Columbia University in New York has risen 67%
since 1995. The University of Chicago said that last year, 24% of its
entire graduating class, 240 students, departed with economics degrees.
The trend marks a big switch for the so-called dismal science, which saw
big declines in undergraduate enrollments in the early 1990s as interest
in other areas, like sociology, was growing. Behind the turnaround is a
clear-eyed reading of supply and demand: In a global economy filled with
uncertainty, many students see economics as the best vehicle for a job
promising good pay and security.
And as its focus broadens, there are even some signs that economics is
In addition to probing the mechanics of inflation and exchange rates,
academics now use statistics and an economist's view of how people
respond to incentives to study issues such as AIDS, obesity and even
terrorism. The surprise best-seller of the spring was "Freakonomics," a
book co-authored by a University of Chicago economist, Steven Levitt,
which examines issues ranging from corruption among real estate agents
to sumo wrestling.
Pooja Jotwani, a recent graduate of Georgetown University in Washington
D.C., says she is certain her economics degree helped her land a job in
Lehman Brothers Holdings Inc.'s sales and trading division, where she
will earn $55,000, not including bonus. She says the major strengthened
her business skills and provided her with something very simple:
"People are fascinated with applying the economic mode of reasoning to a
wide variety of issues, and these forces are causing them to study
economics more and more," says Lawrence H. Summers, president of Harvard
and former secretary of the Treasury.
According to the National Association of Colleges and Employers,
economics majors in their first job earn an average of nearly $43,000 a
year -- not as much as for computer-science majors and engineering
majors, who can earn in excess of $50,000 a year. But those computer and
engineering jobs look increasingly threatened by competition from
inexpensive, highly skilled workers in places like India and China.
"Historically, the trends [in college degrees] are largely connected to
perceived job prospects," says Marvin Lazerson, historian of education
and a professor at the University of Pennsylvania's Graduate School of
Education in Philadelphia. He cites the recent example of computer
science majors, whose ranks swelled in the 1990s and quickly subsided in
the early 2000s, soon after the dot-com bubble burst and many companies
started outsourcing computer-programming jobs abroad.
In contrast, economics and business majors ranked among the five
most-desirable majors in a 2004 survey of employers by the National
Association of Colleges and Employers, along with accounting, electrical
engineering and mechanical engineering. It wasn't just banks and
insurance companies that expressed interest in economics majors --
companies in industries such as utilities and retailing did so, too.
Like many people whose eyes glaze over at a supply-and-demand curve,
Nicholas Rendler, a 19-year-old student at Brown University, in
Providence, R.I., says he finds economics boring. But he has gravitated
to the topic anyway: He chose a major combining economics, sociology,
and anthropology because he thinks economics is crucial to understanding
"Economics can be very frustrating, but it is the world we are currently
operating in and we need the basic framework," he says. Roberto Angulo,
chief executive of AfterCollege Inc., a San Francisco online recruiting
service with 267,000 registered users, says an economics major has
practical job value. "Students are more employable if they study
economics," he says. He graduated from Stanford University with an
economics degree five years ago.
It isn't just the job calculus that is drawing students to the major: It
also is the rapid spread of economic globalization. Many students around
the world are wondering what effect global economic trends will have on
Foreign students studying in the U.S. are flocking to the major. Sabrina
De Abreu, a student from Argentina about to start her senior year at
Harvard, says her country's experiences made her choice easy. "When I
grew up in Argentina, my country plunged into a recession," she says.
"Understanding economics has become a fundamental part of my life."
Indeed, the rising popularity of the economics major appears to be a
global phenomenon. A recent McKinsey Global Institute study found that
the share of degrees in economics and business awarded in Poland from
1996 to 2002 more than doubled, to 36% from 16%; in Russia, the share
jumped to 31% from 18%.
John Sutton, chairman of the economics department at London School of
Economics, says the school's popularity is at an all-time high, in part
due to interest from Eastern Europe. Dr. Sutton says that as these
countries undergo capitalist changes, "bright young students are
beginning to see economic issues highlighted."
Write to Jessica E. Vascellaro at email@example.com