Wednesday, 23 August 2017

The trajectory of the economics major in the U.S.

A couple of years ago, I wrote a post on the depressing state of university economics in Australasia, in particular the closure or downsizing of many university economics departments. However, a recent article by John Siegfried (Secretary-Treasurer Emeritus of the American Economic Association), and published in the Journal of Economic Education (sorry no ungated version), shows that this isn't the case in the U.S. In fact, economics majors are increasing:
The number of undergraduate economics degrees awarded by colleges and universities in the United States was virtually stagnant from 2009–10 through 2012–13. In 2013–14, undergraduate economics degrees began to accelerate, rising about 6.9 percent in just one year, followed by a slightly larger rise in degrees in 2014–15, totaling almost 15 percent over the two years. In 2015–16, however, growth fell back to near a 2 percent increase.
Overall, the number of economics graduates across the 293 universities included in Siegfried's survey has grown over 37 percent between the 2006-07 and 2015-16 academic years. There has been a similar increase over recent years in the U.K. It makes me wonder why Australia and New Zealand should be going so against the trend. Perhaps, as I noted in that earlier post, we really need to be looking closely at what is taught in high schools and reconsider allowing such a dominance of business studies.

One thing appears unfortunately similar across all countries though, and that's the gender gap (which I have covered before, here and here and here). In Siegfried's data, the 2015-16 academic year had the highest proportion of female economics graduates (from the surveyed universities) at 34.0%, up from 31.0% in 2006-07, but not terribly different from the 33.8% in 2001-02. There's still a long way to go to achieve parity.

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  1. Two remarks:

    You contrast the increases in economics graduates in the US and UK with the declines in Oz and NZ, speculating that it is to do with education systems. My observation on several business trips to NZ, however, coming from Oz, was that we have significantly different cultures and economies and, I suspect, different education systems. I would suggest that what we do have in common is that we are not attractive locations for the administrative/research nodes of global businesses, where the skills offered by economists are needed, and which are rapidly increasing their dominance of both of our economies. That suggests the obvious possibility that it is simply supply falling in the face of reduced demand in Aus and NZ.

    You note that the gender gap is common to all four countries. They all have different cultures/economies/education systems which suggests the reason for the gap is the nature of the discipline itself. You characterise the gap as 'unfortunate'. That suggests you personally believe that the extent and distribution of abilities and preferences is so similar (as between male and female) that the 'expected' gender ratio for economists should be 50/50. If so, do you believe that to be true for every academic discipline - eg for astrophysics?, for nursing?. Just wondering.

    1. I'm not convinced that the supply of economists is induced by the demand. That would imply that incoming students recognise jobs that are in demand (or not in demand) and respond to those signals. Having seen many students go through, I don't think they are necessarily making decisions on that basis. The fact that our recent graduates (at Waikato at least) are getting excellent jobs with an undergraduate degree that previously would have required an honours degree or better, and marginal students are getting jobs that good students previously would have, suggests to me that supply has fallen faster than demand. That doesn't preclude that both may be falling, but neither does it suggest that students are aware of this.

      As for the gender gap, I see no reason why we shouldn't expect a roughly equal participation in economics (or indeed any discipline) by both genders, and I think we lose something by being far out of balance. How we address the structural factors that contribute to those imbalances is the challenging question.

    2. On the first point I am probably influenced by my (chartered accountant's) view on the effect of centralisation (and computerisation) of accounting functions on the demand for chartered accountants. At any rate, that was my impression when I retired 10 years ago. However, demand and supply must presumably tend to balance over time.

      On the second point (leaving aside the contentious question of differing abilities) it seems quite self-evident to me that men and women have different preferences. An anecdotal example : I have played both bridge and chess for most of my life. Visit a bridge club and expect to find an approximate balance. A chess club with 20 attendees and it would be a pleasant surprise to find a woman playing - hasn't happened yet! As for "...we lose something by being far out of balance" - well, perhaps in economics or nursing (or bridge), but not in astrophysics (or chess)!