Economists: Roles, Education, and the Evolution of Economic Science
An economist is a professional practitioner in the social science of economics. These experts study, develop, and apply theories to understand how resources are allocated and how markets function. Their work spans a vast spectrum, from broad philosophical inquiries into wealth and value to the precise analysis of specific market minutiae.
To achieve these goals, economists utilize a diverse toolkit of analytical methods. These include econometrics (the application of statistical methods to economic data), mathematical economics, computational models, and regulatory impact analysis. Whether focusing on macroeconomic analysis (the study of economy-wide phenomena) or microeconomic analysis (the study of individual and business decision-making), economists provide the data-driven insights necessary to shape global policy and business strategy.
Key Facts
- Diverse Employment: Economists work across academia, government agencies, and the private sector (banking, finance, and marketing).
- Educational Standards: While most academic economists hold a Ph.D., government roles in the U.S. may require specific semester hours in economics, statistics, or calculus.
- Lack of Universal Licensing: Unlike law or medicine, economics is generally not a regulated profession requiring a license, with Brazil being a notable exception.
- High Influence: Economists hold a dominant position among social sciences, often directly advising legislators and executives on public policy.
- Analytical Focus: The profession has shifted from polymath scholarship toward a highly formalized, mathematical approach since World War II.
The History of the Profession
In the seventeenth century, economic thought was not a standalone profession. Leading thinkers were typically polymaths who integrated economics with law and philosophy. Early pioneers included Richard Cantillon, who identified the "Cantillon effect," and David Hume, who anticipated the quantity theory of money. In 1690, Nicholas Barbon—the inventor of mortgages—published A Discourse of Trade, one of the first works to analyze capital markets and promote free trade.
The nineteenth century marked a period of professionalization. Jean-Baptiste Say held France's first chair in economics at the Conservatoire national des arts et métiers. By the end of the century, the neoclassical school emerged, shifting the economist's identity from a broad scholar to a specialized intellectual, often trained in mathematics.
Modern economic thought continues to evolve in response to global events. The 2008 financial crisis and the subsequent Great Recession led many macroeconomists and financial economists to challenge existing orthodoxies, sparking a Keynesian resurgence—a return to the solutions proposed by John Maynard Keynes to stabilize economies.
Education, Training, and Employment
The path to becoming an economist varies by sector. In academia, a Ph.D. in Economics is the standard requirement. In the United States government, hiring criteria are more flexible, requiring a degree supplemented by 21 semester hours in economics and three hours in statistics, accounting, or calculus.
Economists are employed in a wide array of roles:
- Private Sector: Working in banking, finance, accountancy, and business administration to spot trends in consumer attitudes and economic confidence.
- Government: Serving as analysts who advise politicians on public works and economic policy. In the UK, the Government Economic Service is the largest professional grouping with over 3,500 members.
- Academia: Conducting primary research and teaching the next generation of scholars.
Regional Variations and Regulations
While most countries treat economics as an unregulated field, Brazil is a unique exception. Under Law No. 1,411 of 1951, the professional designation of "economist" is legally exclusive to those who have graduated with a Bachelor of Economics degree in Brazil.
In the United States, the profession is lucrative, particularly in the private sector. According to 2008 Department of Labor data, non-academic economists earned a median salary of roughly $83,000, with the top 10% earning over $147,040. PayScale data from 2013 indicates that corporate economists often earn more than their counterparts in academia.
Sociology and Public Perception
Economics often occupies a dominant position among social sciences. It is frequently perceived as more scientific and formalized than sociology or political science. This is reflected in the higher salaries economists command and the prestige of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (the "Nobel Prize in Economics").
This "insularity" grew after World War II, as the field moved away from moral and discursive dimensions toward the formalism of natural sciences, such as physics. This shift led to an increased reliance on abstract mathematical models and a decline in citations of law and sociology in leading journals. From the 1980s to the 2000s, finance journals became a primary point of reference for the discipline.
Demographically, the field remains heavily male-dominated and is often composed of individuals from higher social strata. While many economists lean left-of-center politically, they are generally less interventionist than other social scientists.
Summary of Economic Roles and Requirements
| Sector | Primary Focus | Typical Qualification | Key Influence |
|---|---|---|---|
| Academia | Theory and Research | Ph.D. in Economics | Academic Journals |
| Government | Public Policy & Regulation | Degree + Specific Credits | Legislative Advice |
| Private Sector | Market Trends & Efficiency | Bachelor's or Master's | Corporate Strategy |
Notable Economists
The field has been shaped by legendary figures across different schools of thought:
- Adam Smith: Known as the "Father of Economics."
- John Maynard Keynes: Founder of the basis for Keynesian economics.
- Karl Marx: Founder of Marxist Economics.
- Milton Friedman & Friedrich Hayek: Influential Nobel laureates.
- Jan Tinbergen & Ragnar Frisch: Pioneers of econometrics.
- Amartya Sen & Joseph Stiglitz: Modern laureates focused on inequality and globalization.
Frequently Asked Questions
Do you need a license to be an economist?
In most parts of the world, no. Unlike medicine or law, economics is not a regulated profession. However, in Brazil, the title of economist is legally protected and requires a specific degree.
What is the difference between a macroeconomist and a microeconomist?
Macroeconomists study economy-wide phenomena, such as inflation, GDP, and national unemployment. Microeconomists focus on the decisions of individuals and businesses and how those decisions affect specific markets.
What is econometrics?
Econometrics is the use of statistical and mathematical methods to test economic theories and analyze economic data to find empirical evidence for theoretical claims.
Where do economists typically work?
Economists are employed in universities (academia), government agencies (public policy), and the private sector, including banks, insurance companies, and corporate strategy departments.
Why is economics considered more "scientific" than other social sciences?
This perception stems from the field's heavy reliance on mathematical models, formal logic, and statistical analysis, which mirror the methodologies used in the natural sciences like physics.