Sources of economics majors: more biology, less business.

• Author: Kasper, Hirschel
• Position: Statistical table

1. Introduction

   There are a variety of reasons to be interested in and concerned about the number of undergraduates who study economics. One major reason is that an economically informed society may make better choices about the allocation of its resources. Economics is an unusually good major to enable graduates to understand and resolve issues of public policy throughout their lives. Concepts such as scarcity, opportunity costs, and weighing benefits and costs have applicability beyond the public policy realm, not to mention the recognition that efficiency need not be synonymous with equity. (1)

   Another, smaller reason is that the number of jobs for academic economists is expected to be closely related to the number of students who study economics. (2) Both enrollment in economics courses and the proportion of graduating students who majored in economics have fluctuated substantially over the last 30 years. Faculty staffing during that period has often been asymmetric: During periods of declines in course enrollments and majors, many economics departments absorbed substantial reductions in their faculties; then when student interest rose, so few faculty were added that students complained that they were both closed out of courses and failed to receive adequate attention from their instructors, whether full- or part-time faculty.

   The point of this paper, however, is not to discuss the long-term trend in the number of students who graduate with economics majors. That has been done (see Margo and Siegfried 1996; Siegfried 2004). Instead, this paper is intended merely to identify the primary disciplinary correlates of majoring in economics so that one can understand which other disciplines students appear to regard as complements to, and substitutes for, their major. Succinctly, those who worry about the vitality of economics departments may want to know where the economics majors have gone when their numbers decline, and where the majors have come from when their numbers increase (Salemi 1996). Were the curriculum a marketplace, participants might ask, "Where's the competition?"

   I examine changes in the proportion of graduating students who major in economics, relative to other common disciplines, in the three decades since the academic year 1975-1976. An accurate understanding of that relationship may help economics departments and university administrators distinguish local events from national ones. A further advantage of correctly identifying correlative fields is that one may better understand why students want to study economics and what they expect to learn. In the last part of the paper, I speculate on various implications of the prime correlates of majoring in economics, noting that some implications speak to the structure of knowledge, while others are supportive of a particular vision of economics.

   There is evidence that the data on the proportion of students who graduate as economics majors may be regarded as a stationary time series (Margo and Siegfried 1996). If so, one must look to "shocks" to understand the reasons for the changes around that series. (3) There are at least two common hypotheses offered to explain the fluctuations in economics majors. Together, they appear to describe the two academic faces of economics as a social science and as a tool to further vocational aspirations.

   First, there is a macro-oriented hypothesis that asserts that policy-minded students choose to major in economics when national economic conditions are adverse because unemployment and/or inflation are strikingly high. The students are at once concerned about the state of the economy and want to help improve conditions. (4) In good times, such students might decline to major in economics, choosing instead majors such as sociology and religion. (5) Second, and a better-documented hypothesis, is the contention that student interest in economics fluctuates with the overall student interest in business topics, which, of course, may merely reflect financial aspects of the economy.

   The second hypothesis has been associated with a type of "accelerator" model whereby many students become, or forego, economics majors depending on whether they can satisfy their primary interest of majoring in business. Salemi and Eubanks (1996) analyzed the relation between economics and business majors, distinguishing between institutions that (i) teach business courses and offer a business major and (ii) those where there are few, if any, business courses and do not offer any kind of business major. At most large universities that offer business courses, the number of faculty in business departments is much larger than for economics so that changes in student interest in business tend to send amplified shock waves of students to and from economics departments.

   If enrollment in economics courses at institutions that offer a business major is driven by a secondary attraction to reluctant students, one may be concerned about issues of both quantity and quality: Should student interest in business courses rise to completely fill those course sections, the excess demand is apt to enroll in economics courses and create a more-than proportionate increase in economics enrollment. That resulting "boomlet" in economics is unrelated to any inherent interest in economics. Any subsequent decline in student interest in business leads to a steep fall in the economics enrollment that was led by student business interest. On the up and down side, students' academic interest in economics is secondary. (6)

   There is a second type of institutional response that may lead to the same result for economics enrollment. A sharp increase in interest in business courses may lead colleges of business to ration their places by raising the requirements for admission or for specific majors within the business curricula. Students unable to meet the higher requirements, but nevertheless interested in business, may then turn to economics departments as the best available substitute (Brasfield et al. 1996; Salemi and Eubanks 1996). By definition, such students will not appear as academically strong as those admitted to the business programs. Any subsequent decline in enrollment in business that shrinks economics enrollments may raise the average measured quality of the students who are left in economics. From just that perspective, Conrad (1996) questioned whether any decline in economics majors is all that unfortunate for economics departments. (7)

   The argument that an economics major is a substitute on the margin for a business major is easier to claim for institutions that do not teach business courses. At those institutions, economics is seen by many students as the closest substitute for a business major, so when academic interest in general business topics rises, more students enroll in economics courses.

   These business-related hypotheses are entirely plausible and evidence supports them (Salemi and Eubanks 1996). Student enrollment in economics and business courses seems to rise and fall together, almost as if they were complementary goods, though changes in student interest in business seems to be the exogenous driving force.

   These insights, however, do not indicate whether the relationship between economics and business is the closest disciplinary link or whether there are links between economics and other disciplines that are even closer. One way to explore this is to examine the trend of the number of graduating students who majored in economics relative to those who majored in other nonbusiness fields. The business-oriented hypotheses lead one to expect that the number of graduates with economics majors varies positively with the number of graduating business majors. However, students may not regard the choices for their majors to be confined to the general business or economics arena. Other disciplines may attract or "compete" for potential economics majors, perhaps strongly enough that there is an inverse relationship between them, such that increases in economics majors are systematically linked to decreases in other majors and vice versa. These other disciplines may be regarded as "competitors" to an economics major.

2. Simple Data Analysis

   The data for this atheoretical, data-driven exercise to examine the correlates of the economics major come from the National Center for Education Statistics (NCES). The NCES reports annual data on the majors of graduating students in more than 100 different fields of study, from agriculture to zoology, from all degree-granting universities and colleges, as reported by the institutions. The NCES data counts only graduating students, meaning that each graduate is assigned one major regardless of whether the student was a double or even triple major. The assignment of a single major to students with multiple majors appears random, so for our interests in the determinants of annual rates of change across majors, it need not be a severe problem.

   Description

   Specifically, I examine data on 10 common majors of graduating students during the academic years 1975-1976 to 2002-2003 (the latest year of available data). (8) The majors include three natural sciences (biology, chemistry, and mathematics); two humanities (English and philosophy/religion); three social sciences (economics, history, and political science); psychology, regarded either as a natural or social science depending on the institution; and business. Business, broadly defined, is the largest major, accounting for an average of 21% of the majors of the graduates during the period. The nine other disciplines accounted for roughly another 22% of the graduating students' majors. The proportion of graduates who majored in the l0 disciplines, taken as a whole, accounted for a slightly declining proportion of the total number of students over the period. (9)

   The number of graduates who majored in economics averaged 19,515 per year, an average of 1.85% of...