Inside Econ-Bus-Ball
Trends in student interest in Economics and Business at liberal arts colleges
Today is a bit of “inside baseball” for the Economics and Business professors in the crowd. It’s been hard for me to find time for my Substack lately1 but I’ve been putting together some information for my department’s self-study that I thought might be interesting to others.
My department recently introduced a new major (Business, Economics, and Society2) to complement the three we already offered (Economics, Mathematical Economics, and International Political Economy). Student interest in our new BESoc major has been strong and our total enrollments are increasing. We have two senior Economics colleagues retiring this year, so we’re in the process of asking the Dean of the Faculty for replacement lines. But should the Dean give us two lines? Or should she give us three? And what discipline(s) should we ask for: Econ or Business?
It might be helpful to know the broader trends in the industry for student interest in Economics, Business, and related majors. And what generally happens when a college introduces a Business major? Colleges and Deans care about attracting, retaining, and supporting demographic diversity. Is it true that Economics and Business are skewed male and are really White? Welcome to Inside Econ-Bus-Ball.
Today’s data again comes from IPEDS, again from the Completions dataset. As you’ll remember from my previous post, all institutions of higher education in the US are required to report the number of degrees they confer by major, race, and gender to the Department of Education. This allows us to track student interest in different disciplines, by examining what fraction of total degrees conferred are in specific majors.
The chart below shows the fraction of all bachelor’s degrees awarded at the top 100 liberal arts schools that were conferred in Economics, Business, or a related discipline, broken out by tier of school. As you can see, interest in Economics and Business is high and increasing slightly, with E&B majors accounting for 1 of every 7 degrees. (Nota Bene: We do not typically comprise 1/7th of the faculty.)
What’s happening in each discipline? The chart below shows the fraction of degrees awarded in Economics, again by tier of school. Whoa! It looks like interest in Econ is tanking at the top 25!
What’s happening for Math-Econ? Interest is sky-rocketing, in exactly the same year that majors in Economics fell dramatically! Hmm, something funny is happening here…
Indeed, something funny is happening here. Over the course of 2017-2022, 9 of the top 10 liberal arts colleges reclassified all of their Economics degrees as Math-Econ degrees, at least in the federal reporting statistics.
What’s going on? US immigration policy changes, that’s what’s going on. When an international student graduates on an F1 visa, they’re allowed to work full-time in the US for up to 12 months without their employer sponsoring a new visa,3 using what’s called OPT. If they get a STEM degree, graduates can apply for a 24 month extension, for up to 3 years of OPT. In 2016, Econometrics and Quantitative Economics (CIP code 450603) was added to the list of STEM degrees, hence why so many schools are now classifying their Econ degrees under CIP code 450603 even if their websites are still advertising Economics degrees.
What’s then interesting is why we have any Economics degrees at all. In 2022, 30 of the top 97 liberal arts colleges reported only Math-Econ degrees and no Econ degrees. 17 schools report both Econ degrees and Math-Econ degrees (my school does this). 41 schools offered only Econ degrees and no Math-Econ degrees. Hmm, somebody needs to clue those 41 schools in…
Anyway, if we look at degrees in Econ or Math-Econ, we see that demand for these majors has been increasing slightly over the last 20 years, currently accounting for 13% of all degrees awarded at the top 10 liberal arts colleges, 9% of degrees at the top 11-50, and 5% at the top 50-100.
How about interest in International Political Economy? Interest in IPE is a lot lower than in Econ-Math-Econ and is perhaps waning a bit in recent years. It’s hard to say because the overall numbers are so small (less than 4% of degrees at the top 10 and less than 1% of degrees at the top 11-25 schools).
Which brings us to Business. It may surprise you to learn that 48 of the top liberal arts schools offer degrees in a Business field (which includes: Business, Marketing, Advertising, Accounting, Entrepreneurship, Finance, Management, Organizational Leadership, Organizational Behavior, Operations Research, and Operations Management) and at many schools they are quite popular. The chart below shows that while interest or offerings in Business are declining at the top 10 schools, more then 10% of degrees are awarded in Business at the top 50-100 and this fraction has been increasing.
What happens to interest in Economics and Math-Econ when a school introduces a new Business degree? This is the $64 thousand dollar question for Economics professors. Many profs suspect that a large fraction of their Econ majors would really like to be Business majors, but because Business isn’t offered at their school they settle for Econ. Is that true? Well, let’s see what happened when 7 schools introduced a Business major and also kept their Econ and/or Math-Econ degrees: Agnes Scott (2015), Wooster (2019), Holy Cross (2018), Kalamazoo (2011), Knox (2018), St. Lawrence (2014), and Wheaton (2016).
As you can see, it’s a mixed bag. Demand for Econ-Math-Econ dropped substantially when Business was introduced at Agnes Scott, Kalamazoo, and Wheaton, and fell a bit at Wooster and Knox. Notably, demand for Econ-Math-Econ appears to have been falling at those schools before the Business major was introduced. When Business was introduced at Holy Cross, demand for Econ-Math-Econ held steady, and even it increased a bit at St. Lawrence before returning to normal levels.
Let’s talk about demographics. Isn’t Economics and Business pretty male? This is what many people think, and yes, it’s generally true. In the next chart, the solid line shows the fraction of all graduates who major in E&B, while the dotted line shows the fraction of men who major in E&B and the dashed line shows the fraction of women who major in E&B.4 Nearly 20% of the men at the top 100 liberal arts colleges choose an Economics and Business degree, while only 10% of the women choose E&B.
Isn’t E&B also really White? That’s actually harder to say. The next chart shows analogous lines for White (dotted) and Non-White (dashed) students.5 Economics and Business actually attracts a higher fraction of Non-White students (almost 16% in 2022) than White students (13%).
What the what, I hear many of you exclaiming, how is it that we do so well with Non-White students when my classes seem so very White?
Ahh, dear reader, that is because liberal arts colleges are very White, not because E&B specifically is very White. The chart below shows the fraction of all degrees awarded to White students by tier over the past 20 years. In 2002, 80% of degrees were awarded to White students. In 2022, 61% of degrees went to White students. It’s basically 50/50 at the top 10 now, but at the top 50-100 65% of students are White.
If we then calculate the ratio of White to Non-White students in Economics and Business, we see that the ratio has settled at about 2 to 1 across all tiers of schools. E&B does do better with Non-White students, but because there are so many White students overall, our classrooms still feel White.
Where does this leave my department and our request to the Dean? Well, I think she should give us 3 lines to replace the 2 retirements so that I have more time and mental space to write this Substack. That is what I know for sure.
It may be a while before I get to my next post, because I’m working on a series that I hope will be captivating but it is slow going. It’s about executives: how much they get paid, how many of them there are, and whether it’s justified by the increasing cost and scale of a modern liberal arts college. Subscribe now for more later.
Something, something, my full time job, etc., etc., kids back in school, hooray!, grumble, why are there so many delayed starts and planned closures?, groan, oh that’s right a few years back I got so annoyed by this whole “working parent thing” that I wrote a paper about it.
Business, Economics, and what now? Yes, we made this up! Errr, I mean, this major is unique to Colorado College! What is it exactly? It’s an interdisciplinary consideration of Business and Economics, with additional courses and insights from other liberal arts disciplines. More info here.
From what I understand, most international folks then try to get an employer to sponsor their H1B visa, which will cost the company $10-20k. Employers are often hesitant to do this until an employee has proven their value to the company, which is why the extra 2 years of OPT is so valuable to new graduates.
Note that the government still collects data according a gender binary, which is limiting, but so it goes.
The government does collect data by more disaggregated racial categories (American Indian or Alaska Native, Asian, Black or African American, Hispanic or Latino, Native Hawaiian or Other Pacific Islander, White, Two or more races), but at many schools the numbers of students in these disaggregated categories is so small that it’s difficult to analyze them systematically. See point above about the fraction of liberal arts degrees awarded to White students.
Thanks for the insightful post! It's interesting to see economics departments reclassifying their CIP codes for STEM OPT eligibility. I have a paper on this trend, which may be of interest: https://edworkingpapers.com/ai24-1040
Ha I knew the issue would be related to STEM designation for work visas. There has been some chat at closing this STEM extension. My guess it will remain under a Harris term, but could be threatened under a Trump admin (though he has gone back and forth on student visa stuff). If it does go away, then these programs likely won't make as much sense.