Why are Economists in Demand?

Why are Economistsin Demand?

John SlomanDirector, Economics Network

Visiting Professor, UWE

www.whystudyeconomics.ac.uk

Overview• Why is economics important?

• What do economics graduates do?

• Why do employers like them?

• What do economics graduates say about their degrees?

• What could I earn with an economics degree?

• What do students say about studying Economics?

http://www.whystudyeconomics.ac.uk/


Why is Economics important?Because it helps us to understand many forms of human interaction. Examples include the production and sale of goods and services, the employment of workers, trade between nations and the flows of finance around the world.It also helps us to predict the economic consequences of human actions and thus provides information to governments, firms and other decision makers.



What do economists do?Economics graduates are employed in a range of posts which may, or may not, be related to the discipline they studied.They work in manufacturing, transport, communications, banking, insurance, investment and retailing industries, as well as in government agencies, consulting and charitable organisations.


What do economists do?

According to Andy Ross, the Deputy Director of the Government Economic Service, the largest employer of economists in the UK:

“Most of the things that economists do don’t even look like economics: adoption policy;

money laundering (detecting!) … The range of topics is truly astonishing.”



Economists help firms or the public sector in decision making and weighing up the costs and benefits of various policies.


What do economists do?


– The meaning of happiness and how to achieve it

– Inner-city dynamics

– Passenger safety

– How to tackle traffic congestion

• Economists often address the following issues– The quality of education

– What you can and can’t get on the NHS and why

– Discrimination by sex, race, age, etc.

– The role of sport in society

– The value of time and even life



– Marriage and divorce: which partner gets the most? – Should drugs be made legal? Would it reduce crime?– The causes and effects of social exclusion – Immigration: does it make us better off? – Does performance-related pay make people work harder? – Are we taxed too much? – Is competition always good? – Do people gamble rationally on the

lottery and on quiz shows on television? – What causes wars? How can we stop them? – Why is obesity on the rise and what can be done? – Should people be allowed to sell their kidneys? – What is the value of education?



– How do people respond to incentives? – Voting behaviour – What causes social mobility or a lack of it?– Why aren’t there petrol stations in the

centre of cities?

– Are cities green? – Why are cities so astonishingly productive? What are

the effects of human beings huddled together?– Should we generate more electricity from wind farms? – Why are there so many junk media

channels, all the same? – Should we put folic acid in bread or

floride in water? – Should nursery care be subsidised?



Climate Change

Who did the government employ to write a report on the effects of climate change and

what can be done about it?Answer: Sir Nicholas Stern: then Head of the GES

– Climate change will affect the basic elements of life for people around the world – access to water, food production, health, and the environment. Hundreds of millions of people could suffer hunger, water shortages and coastal flooding as the world warms.

– Using the results from formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more.

– In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year.




• Firms sometimes employ economists to make use of specialist skills such as economic forecasting, but they also employ economists because the subject gives a good grounding of skills.

• Since economists are literate, numerate and can analyse and evaluate, they are very useful to employers.

Why do employers like economists?

Source: Atkinson, B. and Johns, S. Studying Economics (Palgrave, 2001)



Why do employers like economists?• Quote from Prospects

– Employers value: • economics graduates' understanding of decision-

making• their research and analytical skills• their experience of viewing problems in their national

and international context.

– These skills will be tested through any graduate job selection process.


Strengths of Economics Graduates

• Analytical way of thinking

• Problem-solving


– Recognition and clarifying

– Problem analysis

– Identifying and comparing alternative solutions to problems

• Scepticism over possible misuse of data


I’m looking for people with joined-up thinking ...

people who think and breathe economics.

Government Economic Service Recruiter

[We’re looking for] an ability to think about novel situations in

relation to economic theory.

I need people who have the building blocks of

economics .. who will see a problem in terms of basic

economics and develop analysis from there.

Greater London Authority Recruiter

[We’re looking for] graduates who see economics in the

world around them and don’t need the parameters spelt

out.

Economists as Problem Solvers

What we are looking for in Economics graduates is how

they apply economic theory to real-world problems, find the theory and the evidence to support it and dissect the

problem before looking for its solution.

HM Revenue and Customs

In problem-solving we are looking to see if applicants

are able to quickly recognise problems, clarify the problem, analyse the

problem, come up with different options and solve

the problem effectively.Private-sector consultancy firm

Source: Employers of Economists Survey, Economics Network, 2004

We employ specialist modellers who obviously need strong econometric skills, but generally don't

work under time constraints, and analysts who are required to produce

readable, accurate and precise reports, often at

very short notice. You need to think and to be fluent in

economics.Moody's Investors Services Ltd

Economists as Problem Solvers

that understanding of core principles, technical ability, potential and willingness to learn and

continually updating knowledge are more important than a stock of knowledge.

that graduates are not particularly good at applying knowledge or understanding to practical work situations

because of (i) inability to improvise, (ii) lack of commercial awareness and (iii) lack of appreciation of the human or

cultural context within which they are working.

problem-solving to be a very important attribute but one with which they are only

moderately satisfied because of graduates' lack of real-world application.

Most employers consider:

Employability Backpack (U of Central Lancashire)

UK Employers’ Views on Graduate Skills (all graduates)


Views of Economics graduates


What did graduates like best about studying Economics?

• Understanding how the elements of the economy fit together.

• It was interesting, challenging and could be applied to real-world scenarios.

• It encompassed an enormous variation of subjects such as maths, history, geography, politics, philosophy and business.

• The job opportunities after

• The real-world applications. The fact that the subject is actually useful.

• Applying concepts to real-life business issues

How do you rate your study of Economicsin developing skills for your current job?

Source: Economics Alumni Survey, Economics Network, 2005

Looking back on your time as a student and knowing what you do now about careers and the workplace, would you still choose to

study Economics at degree level?

Source: Economics Alumni Survey, Economics Network, 2005


What can I earn by doing an Economics degree?

• You can earn considerably more than graduates in virtually all other subjects.


Earnings for males in 1996 (in 2007 prices)

5 years after graduation

10 years after graduation

Economics 35,772 55,787

Accounting 35,231 47,492

Bus/Man. 33,631 52,287

Physics – 47,142

History 29,764 –

Geography 27,901 37,241

Biology – 35,435

Education 27,228 35,532

Source: Belfield, C. R. et al. (1997) Mapping the Careers of Highly Qualified Workers, HEFCE Research Series, University of Birmingham.

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Source: Yu Zhu (Dept of Economics, University of Kent), based on data in the Labour Force Survey, HMSO, 2007.

Earnings premia over 2 A-levels by degree subject, 1994–2006


What do students say?

• Two clear messages come from our surveys:

– Students like studying economics

– It gives them useful skills which will help them in employment when they graduate


I can go and talk to my lecturers if I encounter a problem in the subject, and that they are always prepared to help.

Source: Student Survey, Economics Network, 2006

Economics is a really useful science, helping me understanding my

surrounding, and analysing some political speeches and being more

critical about them, not taking them for granted.

What do UWE students say?

I like the fact that we learn how the economic market works because it will be

helpful for me in the future.I like the level of tutor support and the emphasis on

real world applications. The teaching has always been conducted in a positive and lively

manner.

Source: Student Survey, Economics Network, 2006

What do UWE students say?

Seminar classes, just really good Lecture structure-easy to

understand and follow, exam and essay proportions - gives a good chance of getting a good grade

Lecturers manage to maintain interest. The enthusiasm of lecturers is extraordinary -

excellent for creating a good learning environment.

Seminar discussion, to learn about other

students insights and understanding of the

subjects

I hadn't considered economics as a degree before I came to university (I do business and

economics) but the economics part of it has been so much more interesting than i had expected,

and much more interesting than business.

www.whystudyeconomics.ac.ukwww.whystudyeconomics.ac.uk


What economics degrees are available?

• Straight economics degrees, with a strong focus on core theory, or ones that are more applied– Most have various options in particular branches of

economics, such as environmental economics, labour economics, public-sector economics or monetary economics

• Business economics degrees

• Joint economics degrees with another subject, such as Politics, Business, Marketing, Mathematics, Sociology, History, Geography



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Why are Economists in Demand?