The publication of Adam Smith’s The Wealth of Nations in 1776 is considered the birth of economics as a distinct discipline. The book identified land, labor, and capital as the three factors of production and the major contributors to a nation’s wealth, in contrast to the ancient idea that only agriculture was productive.
The field of economics has developed into two distinct models. Microeconomics is the branch of economics that analyzes the market behavior of individuals and firms in order to understand their decision-making processes. Macroeconomics is the study of the behavior of national economies and economic systems.
“The dismal science” is a derogatory nickname for economics attributed to historian Thomas Carlyle in the 19th century, probably in response to the writings of economist Thomas Malthus, who predicted that mass starvation would ensue as soon as the population outgrew the food supply. The nickname stuck, at least in academic circles. Economics was one of the least popular liberal arts majors for college students throughout the 20th century. However, in the 21st century, economics is among the hottest of majors.
Look at the Ivy League, for example. An Ivy League education is often thought to be a ticket to future success. Recent single-digit admissions rates show the high level of demand for an Ivy League degree. It’s significant, therefore, that at six of the eight Ivies, Harvard, Yale, Brown, Columbia, Dartmouth, and Princeton, economics is the most popular undergraduate major, and it has been for a number of years.
It’s surprising to see such rapid growth in the popularity of any major. Three reasons for this phenomenon have been posited, as follows:
- They’re bound for Wall Street
Most Ivy League schools don’t offer undergraduate finance or business degrees, so many students hoping to workin the lucrative financial services industry on Wall Street or elsewhere after graduation choose to get the closest thing possible to the requisite academic training by majoring in economics. However, at a few of Ivy League schools, the number of senior economics majors has eclipsed the number of Wall Street–bound graduates, a sign that not all of the growth in economics can be attributed to the financial sector’s appeal.
- They’re preparing for a tough job market
Although overall unemployment has been low for the past few years, the number of desirable professional entry-level jobs for college graduates continues to decline. Though the job market is rarely “tough” for Ivy League graduates, who usually land on their feet, the last decade or so has been stressful for job-seeking overachievers from the Ivies. In the face of uncertainty, it’s natural that Ivy League students would seek a major that may be considered a financial safety net. Economics majors earn more, on average, than majors in other liberal arts fields and have lower unemployment rates than do graduates of other social sciences and humanities.
- Economics actually got interesting
Perhaps the Great Recession of 2008-2009 was responsible for the initial surge of economics majors because it made students interested in the global economy and because it may have frightened them away from what they considered less practical majors. But, if so, you would have expected to see a reversal of the trend in the next few years as the economy recovered. Today’s freshmen will have gone through high school in an improved economy without headlines about bank failures and billion-dollar bailouts. You’d expect student interest in economics to wane while confidence about finding a desirable job in any field would wax. But the Ivies keep churning out economics majors, even in a strengthened economy. It may simply be that economics will be a hot major for the foreseeable future.
IvySelect, as a college admissions consulting firm specializing in admissions to top-tier schools. We work with you to develop an admissions strategy that is focused solely on you as an individual. We devote the time needed to understand you as a person — your academic record, preferences, strengths, weaknesses, experiences, and educational goals. Among other things, this knowledge base enables us to assist you in recognizing the major that represents the best path to achieving your educational and career goals.