Economics majors are rising

by on September 12, 2007 at 7:59 pm in Uncategorized | Permalink

I had not known the trend was so pronounced:

The number of smart kids studying computer science
peaked a few years ago and has dropped dramatically since. The number
of new computer science majors today has fallen by half since 2000,
according to the Higher Education Research Institute at UCLA. Merrilea
Mayo, director of the Government-University-Industry Research
Roundtable at the National Academies, says the drop-off was
particularly pronounced among women.

Meanwhile, elite schools are reporting
that the number of economics majors is exploding. For the 2003–2004
academic year, the number of economics degrees granted by U.S. colleges
and universities increased 40 percent from five years previously.
Economics is seen by bright undergraduates as the path to a high-paying
job on Wall Street or at a major corporation.

Here is the full story.

1 billg September 12, 2007 at 8:38 pm

No wonder, starting salary for a BS in CS is around $50K, meanwhile bonuses on Wall Street are in the $100K range with starting salaries also around $100K.

The funny thing is how Microsoft dismisses the comparably low salaries and lack of job security as the real reason and, instead, decided that the real problem is that they are not using robots for teaching CS 101.

Maybe Bill Gates should study some Economics!

2 YGA September 12, 2007 at 8:55 pm

Compounding this is that many CS majors themselves are going into finance. I’d say about a third to a half of my year’s (Harvard ’05) Computer Science graduates took jobs on Wall Street.

3 Jo September 12, 2007 at 9:23 pm

Do the data show similar trends among the dumb kids studying computer science–have they peaked too?

Also, are dumb kids not bright enough to see that economics degrees offer the chance at high paying jobs on Wall Street?

What I really wonder, then, is what all the dumb kids are studying in college. Seems like that subject would be a good major, as it will prove easy for a non-dumb student to distinguish oneself from the crowd.

4 JMR September 12, 2007 at 9:32 pm

The article cites a drop in CS enrollment and simply assumes that it’s the “smart kids” that are not enrolling, without a whole hell of a lot to back that up. Maybe the dumb kids have stopped enrolling (because there were a lot of dumb ones enrolled when I was teaching CS in the late 1990s).

Enrollment at “elite schools” is not necessarily a gauge of enrollment by intelligence.

5 mr September 12, 2007 at 9:53 pm

I blame it on MR.

6 GVV September 12, 2007 at 10:36 pm

Here in India, just the opposite.There is a mad rush for computer studies and such kids are considered as brightest.These kids aim at US or some European company jobs, eager to desert India with zero loyalty to India and zero commitment to Indian society.A shameful state of affairs.
Those less-mark-grade students opt for traditional subjects like economics,literature,zoology,botany etc and the entire society looks at them with a condescending smile.Economics has virtually become a female dominated subject so that in class rooms girls are majority.In under and graduate classes,for example,there are very few boys.

7 Peter September 12, 2007 at 10:43 pm

I’ve been a developer for the last 12 years. Between 2001, 2003 and 2004, I spent almost 24 months out of work. Young kids aren’t stupid. They see what is going on, and they vote with their feet. Last year was the first time since 2000 that I was able to put money away for retirement. This sort of thing happened with engineering when the cold war ended. It is only this year that wages are starting to approach 1999 wages for software developers.

8 Hubris September 12, 2007 at 10:50 pm

Well, we are arguably in the last stages of a boom involving finance along with the fact that some of the “elite schools† do not have business colleges. So, I am not surprised.

9 baiano September 13, 2007 at 12:01 am

Read “Liar’s Poker” by Michael Lewis.

10 momsoton September 13, 2007 at 12:21 am

I was a CS major at MIT and was heavily recruited by Wall Street firms. My friends who were studying economics did not do nearly as well right out of college. The CS major is a modern “liberal arts” degree; you can do almost anything with it. In my case, I am getting my PhD in economics. I think studying economics instead of CS as an undergrad just signals that you want a high-paying job without having to do any hard work.

11 Jeff September 13, 2007 at 12:35 am

Economics and Computer Science are both excellent majors and provide excellent mental training in problem solving. I’m more concerned about the students choosing the bizarre specialized, politicized humanities majors.

12 Ted September 13, 2007 at 1:01 am

Ceteris paribus, salaries will be higher in finance than in programming because programming is actually fun. Look at all the people working on open source projects — Linux, Apache, gcc, Gimp — in their spare time. There’s nothing like that in finance (or indeed in economics).

13 Hafiz September 13, 2007 at 4:54 am

Ah… As a recent economics graduate, I think we younglings are doomed by the law of supply and demand.

14 cs guy September 13, 2007 at 7:29 am

This same story about the lack of cs or engineering majors appears in the newspapers every three to five years.

15 GoodneesOfFit September 13, 2007 at 8:36 am

This is all kind of funny to me. After graduating with a BBA Econ in 1999 I made a play at the CS world. Realizing I was not willing to learn any real programing I went to get my PhD in Econ. Now I sit all day… programing.

Funny world.

-GoF

16 Henry V September 13, 2007 at 9:28 am

I must be missing something. Where is the evidence that econ degrees are being equated to Wall Street? If someone wants to make this claim, let’s see data on other majors—in particular, finance and accounting. Do those show the same trends as Economics?

At my institution, the only reason “pre-Wall Street” types major in Economics is because we don’t offer finance as a major. I personally think Econ is a great prep for many things, but it still does not rival finance in the number of people hired at top IBanks.

17 PJ September 13, 2007 at 1:12 pm

At my school a multinational company is already interviewing for “MBA candidates and seniors with finance and economics majors and minors.”

Perhaps economics is seen as the closest subsitute for finance.

18 Anonymous September 13, 2007 at 1:31 pm

Andromeda,

You are of course right about the very rapid pace of change in the computer field. However, this is the very factor which is likely responsible for the high attrition rate, as older programmers either fail to upgrade their skills or fall victim to the perception that they cannot. So I doubt that the situation has changed, although more recent figures would be helpful. Anecdotally, if anything the rise of outsourcing has probably accelerated the trend.

Regarding teachers, I don’t know. Perhaps 50% of them quit within 5 years but the other 50% become lifers? Or perhaps some later return to the profession years later (an option which is very unlikely for computing, due to the rapid pace of change).

19 anonymous September 13, 2007 at 2:24 pm

If you want a high paying job, you need to do something few people can do. Be rare. Being a terrific salesman is rare. Being an incredible risk taker is rare. Having incredibly good social skills and intuition is rare. Having excellent quantitative skills is rare.

So, get a degree in any quantitative field: math, physics, CS, EE, chemistry, econ. It doesn’t matter which, just practice practice practice. Then, learn to take risks. Practice practice practice. Practice risk taking socially, academically, intellectually, physically. Pound the pavement meeting everyone you can trying to creatively take risks and get yourself onto Wall Street. That level of arrogance, impulsiveness, acumen, and brains will make you money.

20 DSH September 13, 2007 at 3:36 pm

I can think of three reasons which probable contribute to this phenomenon.
1.) As others have said, an econ degree is relatively easy to get, doesn’t neccessarily require the sort of quantitative skills that certain people just don’t possess , but still garners more respect than any other liberal arts degree (and provides more of a chance of a high paying job than, say, an English or Sociology degree)
2.) A lot of engineering students are picking up an econ degree as a second major to distinguish themselves in the job market. This has become more prevalent, I believe, due to the rapid growth of the Consulting industry. Firms like Booz, Allen, Hamilton and BearingPoint pay more for ‘IT consultants’ than other companies do for developers even thought the job descriptions are more or less identical. However, in the consulting field there more of a mix of technical and business skills, so a second degree in econ on top of a cs degree gives you a leg up. So, since an undergraduate econ degree is a fairly easy get, the marginal benefit far outweighs the marginal cost, so to speak.
3.) The top graduates from elite econ programs make more than there cs counterparts. Essentially, there is a much wider range of starting salaries for econ majors than there are for cs majors (who work in their discipline). So, even though the average starting salary for econ majors is about 10% less than for cs majors, the potential exists for an econ major to make 100K + right out of college, whereas the top cs majors (working in IS) won’t get more than 60K or so.

21 Half Sigma September 13, 2007 at 4:16 pm
22 yoshi September 13, 2007 at 4:27 pm

I find it interesting that so many people interchange “computer science” and “programming”. Information Technology is more than just programmers – its administrators (network, server), integrators, consultants, help desk (low on the totem pole), etc… I haven’t written a line of code in 10 years and I pull in 150k+. Programmers are more of a commodity than other IT professionals and it shows in the pay scale.

23 PF September 13, 2007 at 6:00 pm

Some relevant data:
http://minimsft.blogspot.com/2006/03/internal-microsoft-compensation.html

Note, that salary is often higher in the Silicon Valley, due to higher costs of living.

24 cure September 13, 2007 at 7:08 pm

I don’t know where this idea comes from that Econ pays better than CS. Top CS grads can, for one, go into Wall Street as well. Top CS friends of mine last year (certainly not Ivy League) were getting offers in the ballpark of 80k + huge bonuses at the startups, Google, defense firms, Microsoft, etc. It’s rather difficult to do that in Econ. If we’re comparing jobs with similar quality of life (say, < 50 hr work week), there's no comparison: CS pays more by far.

25 Dave September 13, 2007 at 8:05 pm

It always amuses me how people are most interested in comparing top performers in a discipline (there is no 4 year program that turns average students into six-figure starting salaries at the mean)…

But they also assume that you can switch between disciplines easily. It seems like the top CS people, and the top Econ people (and there is a lot of chaff in both graduating classes), likely the top people in any discipline are the ones who would be drawn to it no matter what it paid. Steven Levitt would never make millions refactoring database code, it was never really a choice.

26 Trevor September 13, 2007 at 10:13 pm

Microsoft is very profitable. If they gave every employee a $10K raise they would still make billions/year. They can pay more if they need the people — but they don’t.

H1B: the widespread perception is that this is not used to get employees they could not otherwise get, but rather to save money (and there is plenty of evidence to back this up).
This causes fewer CS grads. Therefore those who truly believe they can’t get enough employees should try to abolish H1B in favor of something completely different.

Suggestion: instead of H1B, make available a fixed number of visas per year and auction them off. Auction price would pay salary/benefits for the employee plus adminstrative costs. Firms that need employees can get them at market rate; a US citizen still has an advantage over an equally qualified immigrant, due to the administrative cost delta.

27 Anonymous September 14, 2007 at 12:58 am

Some schools seem to have more degrees in business than a thermometer. An Econ degree is flexible and more apealling when dotted with practical courses that can give students a leg up when graduating…..ie corporate finance… international econimics…investment and securities….etc
in any case CS or Econ your going to be doing better than my sister with a Phd in Psychology!

28 Rob September 14, 2007 at 9:29 am

I think most kids try to study something they are interested in. It isn’t always about the money. I picked economics largely because I didn’t understand it. It was out of fascination more than anything. In fact, I started out in computer engineering and switched because I thought it was boring.

29 Alvin September 14, 2007 at 9:59 pm

I get it!!

This is like the time before most CEOs were outside hires with legal backgrounds [dangerous outside world for large corporations].

Then people aspiring to be CEOs saw the old pattern of rising up a single corporate ladder. Since evaluations were based on accounting data, the best training to get up the ladder was accounting [getting results from inside the corporation was the most important skill].

Then came MBAs, then lawyers.

How many CEOs of large corporations are economists??

30 anonymous September 17, 2007 at 2:10 pm

—No one wants to pay U.S. computer scientists $200,000 salaries when there are plenty of immigrants willing to do the job for five figures

Microsoft and Google pay PhDs in CS 200k on their first year out of school. So does AT&T, Bellcore, and a few others. You don’t know what you’re talking about.

31 Bob March 13, 2008 at 10:37 pm

hi,I University majoring in the legal profession.After graduation,I 徵信 the work of the strong interest.Has worked in several徵信社.Has a wealth of experience. Now I immigrants France,Hope to continue to engage in the work of徵信 credit.
now,is to wake up every day to drink å’–å•¡, shopping. I hope that early awareness of Boles.
thanks,thank very much.

32 matt October 29, 2010 at 11:33 pm

As a mechanical engineer at Cornell, I’ll just say if you major in econ at any ivy you’re essentially GUARANTEED 6 figures fresh out at your choice of ibank, consulting agency, etc. Even at MIT, the largest employer of grads after MIT itself is Goldman Sachs. Any math/sci/engineering sort of major can as well, but you’re making your life a lot harder for zero benefit if you don’t have genuine interest in academia or tech jobs topping out at around $100,000 with bachelor’s and little more with graduate degrees.

Comments on this entry are closed.

Previous post:

Next post: