An important benefit of a college degree is the higher lifetime income that a college degree confers. However, while on average college graduates earn incomes almost twice as high as high school graduates, there is large variation around the average. What determines whether a college graduate will earn a relatively high or low income? Research has shown that the single most important factor is the specific college major.
In this regard, economics majors do very well in comparison with other majors. For example, in recent years the starting salary of economics majors has exceeded the salary of business management majors by approximately 11 percent and marketing majors by 20 percent. The average starting salary of economics majors far exceeds majors such as history, political science, psychology, education, and journalism.
Lifetime income also will be greatly influenced by education beyond the bachelor’s degree. Some 45 percent of economics majors go on to pursue graduate degrees. In contrast, fewer than 20 percent of business administration majors do so. Moreover, rigorous research indicates that an economics major is perhaps the best preparation for graduate studies in business or law. For example, economics majors on average score the highest on Law School Admission Test as well as earn the highest salaries after graduating from law school. Likewise, MBA graduates who had majored in economics earn the highest salaries compared to all other majors with one exception, chemical engineering.
With career outcomes such as the above, it is not surprising that the number of American college students majoring in economics has more than doubled in the past decade. Moreover, the economics major has become the number one major at prestigious universities such as Harvard the University of Chicago, Stanford, and our own University of Wisconsin – Madison.