By JESSICA E.
VASCELLARO
Staff
Reporter
of
THE
WALL
STREET
JOURNAL
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 Education Statistics.
"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 becoming cool.
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: "financial
security."
"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
the world.
"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 them.
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 jessica.vascellaro@wsj.com
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