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Lucrative Career Paths: Earning a Master’s Degree in Economics

October 16, 2017
Miriam Schwartz

What kind of internships should you look into if applying to grad school?

Here’s why you should consider getting your master’s degree in economics.

You may have heard some jokes about economists even before you’ve ever entered a board room. Take these old digs for example:

  • An economist is social science’s bumbling weatherman.
  • It’s said that economics is the only field in which two people can share a Nobel Prize for saying opposing things.

 

While you might not ponder economic theory in line at the grocery store, economic policies have a lot to do with what you’ll pay for your bananas. Economists research, analyze, and forecast a variety of issues that have become essential to roles in government and private industry alike. In fact, a master’s degree in economics is one of the most lucrative master’s degrees you can earn.

Monster places a graduate degree in economics among the top 10 best-paying graduate degrees, with a median pay higher than engineering and computer science.

Path to admission

A graduate education in economics is, well, like the economy: variable and idiosyncratic.

Applying to master’s programs in economics requires a thoughtful and deliberate research process that takes into account your career aspirations and works backward from there. In the U.S., many schools don’t offer terminal master’s degrees in economics, and while some master’s programs may lay the groundwork for eventually pursuing a PhD in economics, they are primarily designed as quasi-professional degrees. Many master’s degrees in the U.S. are awarded ‘’en route” to a PhD program, usually after the first year of study.

Your path to admission to a master’s degree in economics should begin with thorough research of each program’s educational specialty and scope. Does the program focus on applied economics, financial economics, or another narrower field?

For example, if your interests lie in policymaking and working for a government, bank, or international organization, you will fit in best within a policy economics master’s program. If you lean toward research and analysis and working for financial institutions, a quantitative economics graduate degree may be best for you. The program you choose will determine the courses you take, the theories you study and apply, and your career opportunities, so choose carefully.

After you’ve researched each program’s particular scope, you will want to dive deeper and research professors within each of those programs to uncover which professor’s research interests match your own and whether they’re taking on graduate students. This is important for several reasons. When you apply, you will need to demonstrate an understanding of each school’s mission, and that includes understanding the research taking place at each institution. Next, finding a professor with similar research interests is an important step for securing your future thesis advisor. Not only that, but your application to a graduate program may be rejected simply due to your interests not being compatible with current faculty, as you may not be able to find an advisor.

A bachelor’s degree in economics is not required for graduate admission into economics programs, but most programs will require intermediate coursework in macroeconomics and microeconomics, as well as a strong background in statistics, mathematics, and calculus.

With your application, you will submit your transcripts, letters of recommendation, and resume. Many graduate programs may ask you to also submit a statement of purpose, and almost all programs will require that you take the GRE and possibly even the Mathematics Subject Test.

Admission into top economics graduate programs is extremely competitive, and your GRE score is an integral part of your overall application. A high GRE score, especially on the quantitative portion of the test, is a must-have. We’ve said it before: a low GRE score is an application killer, according to 41% of graduate school admissions officers.

While most economics graduate programs will put an emphasis on your performance on the quantitative portion of the GRE, don’t assume that the verbal or writing sections don’t matter or that the quantitative section is “easy.” Also, remember that your master’s degree will often culminate in a thesis, which is a large body of writing. You must be able to express and articulate your thoughts and ideas clearly in writing.

Even with a strong command of mathematics, remember that, at its core, the GRE is a critical-thinking test—not a math test. Consider that the math on the quantitative section of the GRE covers topics you may not have seen since high school. You may be familiar with poring over multivariate calculus, but when was the last time you worked with proportions or geometry?

What you’ll study

Your master’s degree in economics may take several different paths, depending on your program curriculum’s scope and your personal interests. You may study macroeconomic and microeconomic theory, applied statistics and econometrics, or economic and trade policy and development economics. Not all master’s degrees approach the study of economics in the same way, making your thorough research all the more important before you apply to graduate programs. The American Economic Association has an exhaustive list of master’s and PhD programs across the United States that can guide you as you begin your search.

Career paths

A master’s degree in economics is surprisingly versatile, and your ability to manipulate and work with numbers, variables, and large data sets can transition you into a number of lucrative careers. If you’d like to see what’s available, the American Economic Association also publishes job listings for economists (adorably called “the JOE”). Here are just a few of your possible career paths:

  1. Actuary: Actuaries analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk that an event will occur, and they help businesses and clients develop policies that minimize the cost of that risk. According to the Bureau of Labor Statistics (BLS), actuaries will see an 18% increase in employment by 2024, much faster than the average increase.
  2. Economist: Nearly half of all economists work in federal, state, and local government. Federal government economists collect and analyze data about the U.S. economy—including employment, prices, productivity, and wages, among other types of data. They also project spending needs and inform policymakers on the economic impact of laws and regulations. While seeing an average rate of job growth, holding a master’s degree will have a definite advantage in employment.
  3. Financial Analyst: Financial analysts generally focus on trends affecting a specific industry, geographical region, or type of product. For example, an analyst may focus on a subject area such as the energy industry, a world region such as Eastern Europe, or the foreign exchange market. They must understand how new regulations, policies, and political and economic trends may affect investments. According to the BLS, employment of financial analysts is projected to grow 12 percent between 2014 and 2024, faster than the average for all occupations. A growing range of financial products and the need for in-depth knowledge of geographic regions are expected to lead to strong employment growth.
  4. Data Scientist: Skills in big-picture thinking and mathematical modeling make economics graduate degree holders ideal in modeling, building, and manipulating the huge data sets used by everyone from Google to the federal government. This is a relatively new and growing field as government agencies and businesses attempt to make sense of, organize, and profit from their accumulated information.
  5. Statistician/Econometrician: Statisticians use statistical methods to collect and analyze data and help solve real-world problems in business, engineering, the sciences, or other fields. According to the BLS, these analysis wizards will see huge job growth of up to 34% by 2024.

Salaries

Economics graduates with advanced degrees who pursue any of the paths above can expect to earn a median salary between $75,000 and $110,000 or more depending on industry and specialty. In-demand positions in financial analysis and actuarial science will pay upwards of $100,000. Because your master’s degree in economics is so versatile, you can apply your expertise to many related lucrative fields.

Want to take on a master’s degree in economics? Start by going toe-to-toe with the GRE. Explore our prep course options and start your path to a higher score.



Miriam Schwartz

Miriam Schwartz Miriam Schwartz is a Market Manager for Kaplan Test Prep in the Boston area. A journalism school survivor, she spends her time working with advisors, school departments and student groups and forever chasing a parking spot. She is happy to talk your ear off about test prep, pit bulls, hockey, and mid-century modern architecture.


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