Economics Coursework and Long-Term Behavior and Experiences of College Graduates in Labor Markets and Personal Finance

Abstract

Using survey data from over 2,000 students who attended one of four large public universities in 1976, 1986, or 1996, we investigate the relationship between taking more coursework in economics, or choosing economics as an undergraduate major, and a wide range of later decisions and outcomes in labor markets and personal finance, many of which have not been analyzed in earlier research. Generally, economics coursework and majoring in economics are significantly related to higher levels of earnings, home equity, and savings. They are also associated with working more hours and negatively related to completing graduate degrees (except the MBA). Among graduates with positive savings, those with more economics coursework invest more in individual stocks and money market accounts, and are more likely to have employerprovided life insurance. They have fewer credit cards, which are more often paid in full each month. Most of these findings also hold for graduates who majored in business, but on average economics majors worked more hours and earned more than business majors, were more likely to have been self-employed, and expected to retire at an older age. Business majors were more likely to have experienced a layoff, and were even less likely than economics majors to complete graduate degrees (except the MBA). Economics majors expected to save even more than business majors by retirement, and viewed short-term and precautionary motives for saving as more important. Finally, our results suggest that exposure to economics through course-taking is more important for later outcomes than actual performance in those courses. (JEL A22, J3, D12)

Economic Benefits of Studying Economics in Canada: A Comparison of Wages of Economics Majors with Wages in Other Disciplines, Circa 2005

“…Another useful comparison of labour-market performance across academic disciplines can be made by focusing on the career choices of majors. In their United States study, Allgood et al (2011) found that economics and business degree holders tend to make similar labour-market decisions. One type of job economists and business majors are prepared to undertake, and on which data are available in the 2006 Canadian census, is that of business and finance professional.…”

Geographic Differences in the Earnings of Economics Majors

“…Previous researchers have documented that economics is a relatively high earning college major in the United States (Black, Sanders, and Taylor 2003;Allgood et al 2011;Altonji, Blom and Meghir 2012). This is true both for recent graduates and for workers several years after graduation.…”

“…For Canada, though, Finnie and Frennette (2003) find that earnings for economics majors are similar to the average earnings of other majors. Allgood et al (2011Allgood et al ( , 2012) also report differences between economics and non-economics majors for a variety of other outcomes including self-employment, graduate degrees, home equity, savings, investment decisions, retirement plans, and civic behaviors.…”

How to Educate Entrepreneurs?

“…For instance entry level courses could focus only on desirability by emphasizing experiences of entrepreneurs as suggested by Souitaris 1 For rare exceptions refer to Brown and Corcoran (1997) and Allgood et al (2010) who provide evidence that course content affects both pecuniary and non-pecuniary outcomes of education. Additionally, Akerlof and Kranton (2002) and Bishop (2006) study participation decisions and the process of identity formation in education.…”