Planning Your Economics Career
What degree do I need to succeed as an economist?
It might be unclear to new students of economics how much schooling is necessary to succeed as an economist. For some careers, a Bachelor’s degree is sufficient. In others, a PhD is a near-necessity. This article will discuss how much education successful economists typically have.
Generally speaking, there are two career paths one can pursue with an economics degree. Academic economists work for universities and usually combine research with teaching responsibilities. Non-academic economists (sometimes referred to as economists in industry, or “industry economists”) are hired by a variety of employers, including financial institutions, think tanks, NGOs, governments, and more. Some of these economists conduct research much like their academic counterparts, while others have jobs that are far from academia. Industry roles can be further subdivided into public sector (i.e., government) or private sector (i.e., an investment bank) positions.
We have previously covered some of the key differences between these two paths beyond what is obvious on the surface. If you’re curious about the difference in the actual work between these different types of economists, check out the linked article. It offers advice written by an economist who has worked in a think tank and later returned to academia for her economics PhD: “Policy or academic economist: which should I become?”.
How many years of schooling should I complete to become an economist?
As an economist, it’s possible to find an industry job with just a Bachelor’s degree, but these are almost entirely entry-level roles. This can make good sense for a student who recently graduated with a Bachelor’s in economics and wants to work for a few years before pursuing more education.
However, a majority of economists have a PhD in economics, and an overwhelming majority have at least a Master’s degree. According to our Salary Survey results in 2022, fully 92% of economists had either a Master’s degree or a PhD (61.3% had PhDs and 30.9% had a Master’s). Only 6.3% of economists who responded had just a Bachelor’s degree.
A career as an academic economist often requires a PhD
Almost every successful academic economist has a PhD. It would be very difficult to gain academic employment without one, especially since you’d likely be competing with economics PhDs for most positions at universities.
According to the Economist, “Nabbing a top academic job in America requires obtaining a PhD, preferably from a good university”1. Full professor of economics positions (which pay very highly) often require not just a PhD, but work experience and research credentials. More junior academic positions may not explicitly require a PhD, but are usually inundated with applications from young economists who have recently completed theirs. It can be difficult to compete without equivalent academic qualifications, or lots of relevant work experience.
A Master’s degree at minimum is suggested for a career as an industry economist
Even outside of academia, to truly advance in your career as an economist, a Master’s degree or a PhD are very helpful. A Master’s degree in economics should be considered a minimum educational requirement for most economist jobs. As the US Bureau of Labor Statistics states, “Economists typically need at least a master’s degree to enter the occupation”2. This appears to be broadly true across regions, not just in the United States.
Many senior economist positions are only open to those who have a PhD. Further, perusing job postings for economists will reveal a whole host of opportunities for economists with a PhD and a specialization in a subfield. This is because for many industry roles, organizations have a very specific need for an economist and the future hire must have relevant experience.
For example, NGOs that compete for development projects often do so via a “request for proposal” or RFP process, where the funding government solicits RFP responses and selects the best offer. These competing NGOs therefore often need an economist with a PhD and proven experience in that project’s specific topic area (i.e., a certain region or type of infrastructure) in order to successfully win the contract from a government agency. This is because part of the NGO’s pitch is the quality of economist staff who would be assigned to the project.
Becoming an economist without an economics degree
Of course, not everyone recognized as a brilliant economist was trained as such. In fact, some of the most famous economists – like John Nash, winner of the Nobel Prize in economics in 1994 – studied other fields first. Nash was a mathematician by training.
Degrees from other fields can allow someone to shift their career into economics, but this will often limit the economics subdiscipline they can work in. As with John Nash, a successful mathematician can quite certainly become an econometrician or similarly quantitatively-focused economist with their background. Statistics, political science, and finance are other examples of fields that allow one to pivot into an economics career. But, these professionals will have the highest chance of success by working in related subdisciplines – such as policy analysis or financial economics.
This, however, is not easy, nor is it a standard method to becoming an economist. If you are interested in economics specifically, it’s better to decide on a specialization and pursue a relevant degree program in economics based on those interests.
The value of an economics PhD
After reading all of this, the value of an economics PhD might seem important, but difficult to quantify. Not so. Our Salary Survey allows us to estimate the return on a PhD in economics; it turns out that these economists enjoy a much higher average salary than Master’s degree economists. Last year, PhD economists earned 50% more on average than economists with a Master’s degree, globally. Clearly, it’s an investment that pays off.
Naturally, this figure varies by region. The graph included below shows the increase in average pay for an economist with a PhD compared to one with only a Master’s degree in each region.
Average pay for an economist with a PhD compared to one with a Master’s, by region
There are many career options to pursue with a degree in economics. When planning yours, we highly recommend that you search for economics jobs that interest you. Learn their requirements and check the qualifications of professionals who are currently employed in those jobs.
Doing this will help you learn what education, skills, and experiences you still need in order to be a competitive candidate for those positions. Then, you can take economics courses, get your next degree, or attend conferences to acquire the skills and experience you need.
Whatever your chosen path, you can find resources on INOMICS to help you achieve your goals. We wish you the best of luck on your career journey!
Header image credit: Pixabay