Whatever stage you’re at in your educational career, one thing is for sure — the day is going to come when you have to declare your major. If you’re interested in working in the financial sector, that decision might come down to two common choices: a business degree or an economics degree. What’s the difference between the two? Which one will net you a higher salary? Which one leads you to a career you’ll love? Let’s break down these questions and take a look at some of the factors that might influence your decision.
While there is overlap, economics and business degrees differ in a few important ways. Economics is a broad, theory-based discipline. Students who study economics tend to focus on the big picture — how economic systems work, the mechanisms by which they rise and fall, and the “big picture” societal implications of trade. As a result, career paths can be less defined; graduates may have to get creative or think abstractly to find their niche.
Business students, on the other hand, learn more application-focused skills: management, accounting or finance, for instance. In other words, business degrees typically offer ground-level expertise that directly leads to well-worn career paths in the field.
Business degrees also offer more specialization. Students have a huge range of concentrations from which to choose including accounting, marketing, entrepreneurship, healthcare management and more. This can be both a blessing and a curse. An economics major may have a broad range of options upon graduation, while a student who specialized in accounting will probably find his or her options limited to the field of accounting.
For many, potential salary is the chief consideration when picking a major. So how do these degrees stack up? First, let’s look at some salaries for common careers and the degrees they’re tied to at the undergraduate level:
| Career | Average Annual Salary |
| Financial Analyst | $60,000 |
| Research Analyst | $55,000 |
| Economist | $74,000 |
| Data Analyst | $59,000 |
Source: Payscale.com
| Career | Average Annual Salary |
| Office Manager | $48,000 |
| Marketing Manager | $62,000 |
| Financial Controller | $83,000 |
| Accountant | $51,000 |
Source: Payscale.com
According to Payscale.com, the average annual salary for all Bachelor of Arts in Economics degree holders is $71,000 as of 2019, while Bachelor of Business Administration degree holders saw an average annual wage of $61,000. Statistics compiled by The Hamilton Project in 2014 bear this out as well. Right out of the gate, economics graduates with bachelor’s degrees made $35,000 a year, while graduates with business management and administration degrees started out at $28,000 per year. Mid-career, the disparity was even greater — 19 years into their careers, economics majors were making an average of $85,000 a year, while business management and administration major were bringing home $64,000 annually.
What about those with master’s degrees? Did that extra education tip the scales? Here are some comparative numbers:
| Career | Average Annual Salary |
| Economist | $71,000 |
| Data Analyst | $63,000 |
| Financial Analyst | $68,000 |
| Research Analyst | $63,000 |
Source: Payscale.com
| Career | Average Annual Salary |
| Operations Manager | $75,000 |
| Project Manager | $78,000 |
| Financial Controller | $84,000 |
| Accountant | $53,000 |
Source: Payscale.com
As you can see, at the master’s degree level, the salary differences between the degrees become less marked. In fact, according to Payscale.com, Master of Business Administration degree holders as a group made an average annual wage of $79,000, while people with a Master of Science in Economics made an average salary of $77,000.
Of course, salary isn’t the only consideration when it comes to choosing a degree major. It won’t matter what your potential salary is if job growth is stagnant in your field and you can’t find employment. Luckily, the U.S. Bureau of Labor Statistics (BLS) offers predictions for some common careers in both fields.
On the economics degree side, the BLS projects that employment for economists will grow by 8.1% between 2018 and 2028, while financial analysts and market research analysts will see growth of 6.1% and 20.4%, respectively.
Careers related to business degrees will see upticks as well. Employment is expected to rise by 6.4% for accountants and auditors, 8.1% for marketing managers, 16% for financial managers and 7.4% for business operations specialists.
Based on the salary and job growth numbers, economics degrees might offer more value, especially as an undergraduate degree. However, business degrees appear to have a slight advantage at the graduate level. Of course, much of the value of your degree will depend on factors that can’t be broken down into numbers. To decide the right degree choice for you, these salary and growth statistics should be balanced with considerations like what you enjoy doing and what kind of impact you’d like to have on the world.