What are the opportunities available to students studying economics? If you are in the second or final year of your economics degree and interested in securing an internship or graduate job you will be faced with a bewildering array of options. To give yourself the best chance of securing a role you must focus on applying to one industry and know that industry like the back of your hand. Submitting applications across a variety of industries should be avoided because it is not time effective. Below is a list of sectors that seek to employ economists every year. This list is by no means exhaustive but it should give you an idea of where to focus your time and efforts.

Investment banking

Advantages:

Very high starting salary

Variety of work

The opportunity to network with senior management

Disadvantages:

Extremely competitive

For many roles ‘who you know’ is more important than ‘what you know’

Many of the banks have target universities

Very long hours with weekend shifts seen as standard

High stress environment

Low job security

Every year investment banks draw a huge number of applications from economic students for their internship and graduate schemes. With starting salaries of £40,000+ and bonuses, it is easy to see why. Moreover, many of the positions offered by investment banks are tailored to the skills of an economist. For example, a position on the trading floor requires graduates to analyse a particular firm or sector, weigh up costs and benefits and understand risk. All of these skills come naturally to students from an economics background. Furthermore, economic students are often much more aware of current issues surrounding the economy as well as the banking sector. This is why so many of the positions within this sector are given to economists.

However, any undergraduate considering a career in investment banking should not do so lightly. It will require an enormous amount of time and effort. If you do have your heart set on this career path then the earlier you begin tailoring your CV the better. Most graduates who gain a position at an investment bank do so through an internship. To gain an internship your first-year academic results need to be impressive. This will mean that your first-year experience will be very different from that of your best friend who is studying film. And remember, even if you spend all three years of your university life achieving fantastic academic results, being president of the banking society and playing five different sports, this may not be enough to secure you a role at an investment bank simply because you go to the wrong university or your dad is not the CEO of Lloyds Banking Group. Having said that, do not be discouraged from applying to this challenging, exciting and highly rewarding industry. Just be aware of the sacrifices that need to be made in order to be successful.

Professional services

Advantages:

High starting salary

The opportunity to complete a professional qualification

Large graduate investment

Disadvantages:

Very competitive

Many roles are exam orientated

When someone mentions the professional services industry the first thought in every undergraduate’s head is ‘The Big Four’ (PwC, Deloitte, KPMG and Ernst & Young). Much of the work these big four firms undertake, as well as others in the industry, does depend on the economic climate and regulation. Economists’ knowledge of both of these factors makes them especially attractive to professional services firms.

One of the major benefits of this industry is that firms make a large investment in all of the graduates they take on. Part of this investment is to put all of their graduates through a professional qualification. These qualifications will be taken alongside your day-to-day responsibilities and can last from three years (ACA and CIMA) up to six (actuarial exams). Students studying economics will often get exemptions from some of the exams in the first year of these qualifications. Economists will also find their degree very relevant to the modules they have to study in subsequent years of these qualifications and the projects their company will place them in.

Studying for a professional qualification may not be to the liking of some graduates who want to leave their exam-taking days behind them. Moreover, if you fail any of your exams twice your contract with your employer may be terminated. This can be very stressful for graduates. However, getting one of these qualifications on your CV does look very impressive.

If you are interested in following this career path make sure you spend a lot of time researching the service line you want to apply for and each firm’s core competencies. Both of these factors will be heavily scrutinised in any interview you may get.

Multinational companies

Advantages:

Good starting salary

High job security

Under-applied to by economists

Large number of roles

International work opportunities

Disadvantages:

Graduates may feel detached from senior management

Work may not have much impact

The types of organisations that I would include under this heading are Unilever and P&G, but the list is long. For example, most organisations in the food industry, the car industry and the aviation industry will have employees working for them across the globe. These firms have many roles which particularly suit economic students such as finance, strategy and research. During a graduate placement, students will often get to experience more than one of these business areas. As well as the opportunity to experience different roles, some of these organisations will offer students time in one of their foreign offices. Moreover, since economists tend to apply to the first two sectors already mentioned in this article, competition between economic students for these placements is relatively low. However, don’t think that you will be able to walk into one of these companies. There will still be fierce competition from students from every academic background. There are negatives to working in a large international organisation. First, as you will likely be buried underneath many layers of hierarchy there could be limited scope for innovation or creativity. Second, the work you are doing may seem far away from the mission statement of the organisation. Despite these concerns, ambitious young economists should give more consideration to a career in this sector.

Others

Asset Management (M&G, Baillie Gifford) – Similar to investment banking with slightly less pay and slightly less competition

Retail Banking (NatWest) – Lower pay than its glamorous big brother but far fewer working hours

Market research (Nielsen) – An area of work where economists can put econometric and statistical theories into practice

U.K. firms (Sainsbury’s) – Many U.K. firms will offer management schemes perfect for those economists who want to become future leaders

Advice

Regardless of the industry or organisation you would like to work in, there are some general tips to help you succeed:

• Start thinking about your desired career as early as you can. The best way into many organisations is through an internship, which requires students to work hard during their first year.
• Be realistic. Do not apply to investment banks if you have three Bs at A-level; you will just be wasting your time.
• Once you have chosen a sector, do as much research around that sector as possible. Good places to start are your family and friends, the university careers service and this website: www.studyingeconomics.ac.uk.
• Expect to be disappointed. When you are applying to U.K. internships and graduate schemes you are competing with the best students from around the globe. The quicker you can learn to deal with rejection the easier the whole process will become.
• Be persistent. Applying to jobs while studying towards a degree can be very difficult, especially when your job applications don’t appear to be going anywhere. As long as you meet the minimum requirements and do your research you will get an interview eventually, so apply to as many companies as it takes.
• Try to enjoy it. Interviews and assessment centres can be nerve-racking and daunting prospects. But people are rarely as intimidating as you think they will be. To make these experiences enjoyable and rewarding, think of each interview and assessment centre as opportunity to learn about yourself and the people that work there.

It has throughout history had many names. Philosophers today call it the problem of induction. At its heart it says that although we observe events happening, we cannot prove that an explanation of the process behind why these events happen is the right explanation. This is because the process behind the events is entirely unknown to us and in many cases will prove exceedingly complicated.

Say you want to look at the effect of alcohol taxes on car accidents. You postulate that higher taxes on alcohol will cut its consumption, and thus cut the amount that people drink and drive. If people drive less while drunk, then less of them will be driving into trees, shopping malls and other objects that get in their way.

You decide, being a classical economist, that the best way to explain this relationship is to form a linear model linking alcohol taxes to car accidents. A linear model is essentially one that says a rise or fall in one variable (taxes) will lead to a proportional change in the other variable (car accidents). You then estimate this model using some form of regression analysis (this is how economists by and large estimate relationships) and find that a rise in taxes of 1 penny on the pound leads to a fall in car accident rates of 0.6%.

So we have found our result! The problem we now have is that we cannot be sure that these estimates are accurate. Economists will now turn to a concept called statistical significance. Essentially, is the relationship between alcohol taxes and car accidents a fluke of the data or did it arise because higher taxes tends to coincide with fewer accidents? Say our data passes all of these tests, what has our study learned?

This is where the problem of induction exists. At heart all we have shown is that higher taxes tend to be seen with lower rates of car accidents. We cannot say how this has come about. It could be because people drink less. But is it because the amount of drunk drivers on the road is lower? Or is because the drivers are now less drunk? Perhaps it is because areas with higher alcohol taxes tend to have safer drivers?

If the last reason is the main cause behind fewer car crashes and the government decides as a result of our study to raise alcohol duty in order to cut car crash numbers then they are likely to be very disappointed. This is why this is such a problem.

Perhaps the worst bit about it is that we won’t know when this problem is important and when it isn’t.

Here are a few links to look at if you are interested in reading more into it:

http://www.myhealthnewsdaily.com/a-hike-in-the-price-of-booze-could-make-us-all-healthier-0432/

http://en.wikipedia.org/wiki/Problem_of_induction

http://www.economistsdoitwithmodels.com/2011/04/06/why-publication-bias-matters-in-one-cartoon/

What is happiness? I don’t think anyone can pinpoint the definition of this word because there are so many ways to be happy. One thing for sure, happiness is not proportional to the amount of wealth in one’s possession. In fact, we can be happy from very simple things that are given to us. For me, happiness comes from the ability to appreciate what you have. Coming from this perspective, being well-off sometimes just doesn’t do the good. Well, this is the case with me at least.

When I first came to Ukraine, my family didn’t have much money. We were living in a very small two-room flat. My dad was finishing his PhD thesis, so we had to live off the money he had earned before that. It was difficult, but during the first summer my dad would still drive the whole family to the local McDonalds to buy the cheapest ice-cream they had on offer: vanilla cone that back then cost around 20p. My sister and I would have one ice-cream each because that was all my parents could afford. Looking back, those were the happiest days in my life. Now my family is in a much better position; my parents can afford to send me to England to study and I have Häagen-Dazs instead, but all these are not necessarily as valuable as the vanilla cones I had when I was nine. I definitely appreciated everything I had more back then.

Luckily, we can use economics to explain the phenomenon of happiness. Economics is largely based on the theory of utility. The more goods we consume, the more utility we derive. Pretty simple I guess. However, is happiness equal to the amount of utility we can get? Many people would say so, but if happiness is all about appreciating, then this is not true. Instead, happiness must be the marginal utility you can derive from consuming an extra unit of good. And the truth is most people in our world have diminishing marginal utilities. If I couldn’t afford a vanilla cone, and you gave me one, I would be over the moon. At that very moment, nothing in the world can make me happier. However, if I could buy plenty of them, and you gave me one more, it would mean nothing to me.

The more we possess the less appreciative and happy we become from gaining extra. Simple economics tells us that consumerism and wealth will eventually eliminate happiness from the world. This may explain why poor working people in countries like Nepal and Vietnam look content and happy with their lives. Sure, there are many things that can be improved and done, but those people are much happier because they can appreciate every little thing they get – the things that people in the Western world now take for granted. Unfortunately, there is no going back on this. We can only try our best to find the rare simple moments of true happiness.

Happiness is difficult to understand. One will need to go through all the ups and downs of life in order to gain just a vague idea. It is no good being in your comfort seat and thinking that you know what makes people happy. I guess it is a bit naive and idealistic. Really, go and experience the world through your eyes and see for yourself what makes you and other people happy. For me, nothing can make me happier than being loved and surrounded by friends and family, even if that means I will not be able to buy the latest iPhone that’s coming out.

• Understand the different study routes available within the field of economics
• Understand the career opportunities economics can offer: jobs, salary, work/life balance, working abroad, qualification routes, required skill
• Meet with organisations and professionals who apply economics in their field

More information, including how to book onto the course, is available online.

QUICK WIN ECONOMICS, Oaktree Press, 2011

Link to Book (€14.95)

Link to ebook (€4.95)

by Stephen Kinsella, Lecturer in Economics, University of Limerick.
http://stephenkinsella.net

Q: What is this book about?

Quickwin Economics looks at the 100 most common questions asked in
economics and gives short, commonsense answers, normally with a chart,
graph, or example to back these answers up. The emphasis is on rapid
understanding of the key elements of an idea, with links to further
readings, other important concepts, or real world examples given just
after every entry.

Q: Who is it for?

The book is written to be halfway between a Wikipedia entry and a
textbook. It portrays economics as an unfinished conversation rather
than a canon of knowledge. Economics as it exists today is as full of
contradictions as it is full of promise and insight. Readers will get
a sense of this from the book.

Q: Can you give us a feel for the book?

Sure. Here’s something I wrote for the book about Monetary Policy.
It’s an extra entry, but you’ll get the idea of the book right away.

Q: Can the government manage the economy through monetary policy?

Monetary policy is a set of tools that governments use to control the
levels of spending in an economy. By setting interest rates and
reserve rates on levels of funds that banks must have to meet
withdrawals, by buying and selling government-backed securities, by
deciding how much money to allow into circulation, and by providing
credit to private banks, central banks use the instruments of monetary
policy to try and keep the economy ‘on track’.

So, if the economy is in a slump, central banks can reduce the
interest rates at which they lend money to private banks, allowing
private banks to lend more cheaply, so increasing the amount of credit
in the productive parts of the economy, because banks lend more to
more people, and the economy gets stimulated.

If the economy is going ‘off track’, and inflation is rising as a
result, then the central bank can increase interest rates to private
banks, making loans more expensive, and ensuring the economy stays ‘on
track’, that is, close to its potential output.

If the central bank wants to reduce the money supply, it can start
selling long-dated bonds to the public (usually via private banks and
lending institutions), which buyers pay for by using their deposits of
cash. Banks thus have less money on their books to lend with, and so
the volume of lending drops, followed (in theory) by a drop in
productive activity in the real economy.

Monetary policy is not a science, but rather an art – and does not
always work as intended. In an era of globalised money, the inflows
and outflows of currency make operating a domestic monetary policy
extremely difficult, even for a large country like the United States.
There are many other difficulties besides, including lags between the
setting of monetary policy in a central bank, and its effect on the
real world, and the existence of financial ‘innovation’, where private
banks and lending institutions produce ‘new’ and unregulated financial
products, which make the imposition of credit controls very difficult,
if not impossible.

Economics Network Student Challenge 2011 Winning Entry

http://www.edge.org/q2011/q11_2.html#pinker

http://www.edge.org/q2011/q11_2.html#evans

Hope you all enjoy reading this

The content provided can be in any format about anything related to Economics: current affairs and politics to day-to-day activities, such as analysis of economic concepts in movies and music. We also encourage entries about the social life of Economics students. Most entries will go to Economics in Action blog, but there is a possibility to write a material for other sections of the websites.

Being a contributor for us will be beneficial for you in many ways. Firstly, if you want to pursue journalism, this is a great way to start. The websites are very popular with lecturers and students, so you will have an audience. If you become a frequent contributor, we will make sure your name appears on the websites, and this will look great on your CVs. Finally, writing something contemporary and interesting will widen your views about Economics as well as distract you from all the maths you have to do for your course.

If you are interested, please email Anh with your details and a possible entry. We can also discuss what sort of material you would want to write or feel comfortable writing.

It’s not every day you see a children’s book taken apart for its assumptions about consumer behaviour and the private sector, but that’s just what reviewer Glenn Fleishman does, with tongue somewhat in cheek. Fleishman seems exasperated that plenty of adults’ understanding of money and markets is no more sophisticated than Isabel’s Car Wash, and that some of those adults have responsible jobs.