Education

College Major & Income Sources

Zachary Bartsch2 Comments

We already know that economists earn more income on average. But when and how one earns income matters for how you spend your time both now and in the future. Being more productive affords the option to earn more money by working. For that matter, it also affords the option of staying home or pursuing passion projects at work or elsewhere.  Earning more money earlier in life also has implications for how you spend your time later in life.

Specifically, given the choice, you may choose to work less as a young adult so that you can spend more time with your family. The tradeoff isn’t just whether to work now or spend more quality time with others. After all, money can be saved for the future. Choosing to work less (or for a lower salary) today means that you may choose to work more in the future in order to achieve your desired standard of living. Personally, assuming I make it to old age, I would very much like to afford spending time with my family.

The more that you earn earlier in life, the more that you can save and invest for the future. The more that you save, the more that you can enjoy the fruits of compound interest. It’s not just a matter of earning more now rather than later. If you work and save now, then your future income can be passive. That is, your future earnings won’t require you to spend your time in an office or otherwise employed. You can still do that if you want, but you wouldn’t *need* to.  By having more retirement, investment, and social security income, your future self will earn plenty of income without spending as much time formally working.  You can instead spend time with loved ones or on other pursuits.

Below is the stacked bar graph of average income sources over each decadal age cohort. All data is from the 2024 ACS, so it’s just a snapshot in time rather than following individuals over the course of their life. I singled out people with Economics, Finance, and other 4-year college degrees. Economists make the most lifetime income if we count salary and other compensation alone. But if we look at the older cohorts, economics majors also earn more passive income. You’d think that Finance majors would earn more from investments. But among people in their 70s, economics majors earn more investment and retirement account income. Finance majors do earn more social security in that cohort, however.

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Income By Major (ACS 2024)

Zachary Bartsch9 Comments

A chart showing the average income by major was recently making the rounds on social media. So, I tried to replicate it. It turned out that some of the college majors were omitted. That part actually makes sense. The 2024 American Community Survey includes 174 degree fields – which is way too many for a clearly labeled bar chart. So, for local advertisement, I used only the majors and their equivalents that are offered at my university.  That chart is below (unweighted).

These are just raw average earnings by college major for employed adults. They all have decent sample sizes. Below is the cumulate distribution of sample size for each major. The smallest sample size is 45 (Military Technologies) and only 3% have sample sizes below 100. Only 34% have sample sizes below 1k.

You better believe that my colleagues and I show this chart to every single one of our classes. Obviously, it’s truncated from the full 174 majors, but it’s the relevant chart for us. If we use the full sample of college majors, Economics ($170k) drops to 3rd highest income, behind “Petroleum Engineering” ($173k) and “Health and Medical Preparatory Programs” ($183k). To be perfectly honest, those latter two sound a lot more difficult and have surprisingly little pay bump in compensation. Being more difficult is also consistent with the smaller sample size Economics=13k, Petroleum Engineering=343, and Health and Medical Preparatory Programs=1,099.  

One challenge that I’ve heard about the chart is that top business schools, such as Wharton, have Economics majors and various business concentrations. So, those top performing financiers are getting categorized as Economics in a way that is a bit misleading to young students elsewhere who are trying to decide on a major. If that’s true, then we should see Economics drop in the rankings if we omit the top-most earners.  After all, the criticism is that they’re pulling up the average.

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Welcome Back to School: Potential College Students are Now Declining

Jeremy HorpedahlLeave a comment

If you have spent any time around higher education lately, you have probably heard of the “demographic cliff” or “enrollment cliff” for years now. Well, it’s finally here. In terms of total number of births, the US peaked in 2007 at a little over 4.3 million births. That’s the highest year ever, even higher than the peak of the Baby Boom (not in terms of fertility rates, of course, I’m just talking about absolute number of births).

Babies born in 2007 turned 18 in 2025. But after 2007, births started to fall. In 2025, there were just about 3.6 million births, a decline of about 700,000 babies since 2007, or a 16 percent decline. The number of 18-year-olds won’t be exactly the same as the number of births in a given year: it’s actually usually a bit higher, as net immigration is much larger than the small number of children that die before they reach 18. For example, the 1982 birth cohort had 3.68 million babies, but 18 years later in the year 2000 there were 4.08 million potential college students.

Historically there have been about 10 percent more 18-year-olds than the birth cohort, but lately (2021-2025) it has only been about 5 percent higher than the birth numbers.

There are, of course, all kinds of social, economic, and political implications of falling births. I just want to mention one that is specific to the industry that I work in: potentially falling college enrollment. And because this enrollment will not be uniform across states and universities, this will cause serious budget issues for many colleges in the coming years.

Some folks in higher ed have lately been asking when the demographic cliff will hit. It’s here:

Announcing the Disability Records Project

Zachary Bartsch1 Comment

Did you know that we have access to digital copies of the historical US census rolls? You can also find the digitized data at IPUMS. However, the data for people with disabilities is not great. It depends on the year, but those data have error rates on the order of 20% or higher.  We have the digital census rolls, the data just doesn’t match them.

So, I created a non-install windows computer application that lets people identify disabled people on those digital census rolls. Complemented with machine learning, my goal is to improve the accuracy of historical records about people with disabilities. Historical and quantitative research about disabled populations is relatively thin. We can do better. If you have students who would benefit from this research experience, then do please let me know! I can approve your institution’s email domain and we can get started.

The application is really straightforward with basically two user-facing features.

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Uncertainty Increases Profits?

Zachary BartschLeave a comment

Most people have an intuition that uncertainty can harm economic outcomes. Baker, Bloom, & Davis (2016) and Bloom (2009) demonstrated that industrial production and manufacturing decline in the face of policy uncertainty. The typical mechanism that people suggest is that uncertainty about the future causes people to engage in precautionary saving, resulting in fewer sales.

The theory continues that firms consequently decrease production as demand for their output declines. Firms aren’t interested in causing the quantities supplied and demanded to be equal. Rather, they don’t want to produce too many goods that don’t get sold or don’t get sold at an adequate markup. Production is costly.  A related theory is that more persistent or longer-run uncertainty can also depress investment, since the riskier future increases the tail risk of losses.

Rather than make a risky investment, one could instead just hold off and wait for some of that uncertainty to get resolved. There’s tradeoffs to this, of course. As future costs and benefits become clearer, they also get priced-in to asset values. So, there is an optimization problem. The possible downside outcome is big and uncertain. If the risk of the investment gets resolved and the downside outcome is still too likely or harmful, then a project manager did the ex-post ‘right thing’ by waiting.

But, if the downside risk disappears or is found to be very small, then waiting to invest in the project incurs an economic cost. Either 1) the profitable project and its associated profits will occur later and less valuably, or 2) other firms also resolve their uncertainty and bid up the price of the project’s inputs. Invest too early, and the downside is large and uncertain. Invest too late, and you may lose the potential upside partially or entirely.

But can uncertainty systematically increase profits?

Walter Oi said yes.

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Joy Explains how to integrate AI into a statistics class

Joy BuchananLeave a comment

I have put a working paper on SSRN describing three ways I incorporated AI into my Business Statistics 200-level class for undergraduates at Samford University in Spring 2026. Read the paper at the link.

Connecting Classroom Econometrics and Excel Training with Large Language Models (SSRN)

Abstract
Economics education almost always includes a component of statistics. Most undergraduate economics curricula require an upper-division econometrics course, and many economists teach data analysis. These courses help students become conversant with major contributions in economics research, but they can be challenging to teach. On its own, the mathematics of regression, error minimization, and statistical software may not feel exciting to students, especially compared with the intuitive economic reasoning that often draws them into the discipline. At the same time, students are increasingly interested in artificial intelligence and large language models. This note describes three practical teaching exercises designed to connect ordinary least squares, Excel training, and LLMs. The goal is to use students’ curiosity about AI to motivate classic statistical reasoning and practical spreadsheet skills.

The image is from ChatGPT 5.5 Thinking mode and it took over a minute to generate. The fact that their laptop screen is pointing away from them is funny (unrealistic). The portrayal of Tom Holland and Zendaya is good, which is what the audience cares about. So, this seems like a case of AI hallucinating up the thing that people want.

I posted back in February about the LLM Telephone game: Telephone Classroom Game for Teaching Large Language Models

Citation:
Buchanan, Joy, “Connecting Classroom Econometrics and Excel Training with Large Language Models” (May 27, 2026). Available at SSRN: https://ssrn.com/abstract=6839039

Note: I have been posting my papers to SSRN for a long time as a way to distribute them faster and more widely. I have heard rumors that SSRN might stop working, for my purposes. If anyone has suggestions for what I should do about the papers I have up there, please let me know! Or, if you are readying this post-summer-2026 and want a copy, send me a message at my Samford email so I can send you a copy.

arXiv will ban authors who submit papers with LLM mistakes

Joy Buchanan1 Comment

In the world of academic preprints, arXiv has long been the go-to platform for researchers to share work quickly. But with the explosion of generative AI tools, the repository is drawing a line in the sand.

On May 14, 2026, arXiv moderator Thomas Dietterich announced a clarified enforcement policy. If a submission contains incontrovertible evidence that authors didn’t properly check LLM-generated content, all listed authors face serious consequences.

What counts as “Incontrovertible Evidence”? The policy targets clear signs of unchecked AI output, including:

  • Hallucinated or fake references
  • Meta-comments left by the model (e.g., “Here is a 200-word summary; would you like me to make any changes?” or placeholder instructions like “fill in the real numbers from your experiments”)
  • Other obvious errors, plagiarized text, biased content, or misleading claims generated by AI

arXiv’s Code of Conduct already holds every author fully responsible for the entire paper’s contents.

The Penalty

  • One-year ban from submitting new papers to arXiv.
  • After the ban, future submissions must first be accepted at a reputable peer-reviewed venue before arXiv will host them.

At first researchers discussing the policy online seemed happy about the one-year ban, but when I pointed out that it is essentially a ban for life to use it at a pre-print venue, some people became nervous.

Why now? arXiv has been overwhelmed by low-effort “AI slop.” These papers are marked by fabricated citations and shallow summaries. This erodes trust in the entire preprint ecosystem.

In response to the complaints (someone like me would be worried that I’ll somehow let an error slip through and then be banned for life from posting working papers), Scientific Director Steinn Sigurðsson shared:

on the whole @arxiv flap about hallucinated references etc

you don’t see the stuff we reject… some of it is really really egregious

the decision to impose additional consequences is largely to throttle that stuff so n00bs and bad actors don’t trash us trying repeatedly

This is the problem that we face with every internet forum. A few bad actors ruin it for good people.

In 2022 I wrote Content moderation strategy

Elon Musk buying Twitter is the big news this week. He wants to enhance free speech on the site and, according to him, make it more open and fun. Some fans are hoping that he will make the content moderation and ban policy more transparent. Maybe that’s possible. 

If no one can be banned, then bad actors will bring the whole platform down. Inevitably, good people get caught in the net, and it’s devastating to be locked out of a platform where your peers are sharing.

However, if you want to be taken seriously by tech folk then ask for a system that is possible. A substantially better experience might be incompatible with the site being free to users.

Part of the problem that I don’t hear people talking about is that a free platform is not easily compatible with good customer service.

For some not-fake work and citations: Buchanan et al. (2024) provided early clear evidence that a mark of LLM-written work is fake citations. And, Buchanan and Hickman (2024) show that certain framings can prompt people to be more suspicious of AI-generated writing, such that they are pushed toward doing a fact-check before believing all claims.

Buchanan, Joy, and William Hickman. “Do people trust humans more than ChatGPT?.” Journal of Behavioral and Experimental Economics 112 (2024): 102239.

Buchanan, Joy, Stephen Hill, and Olga Shapoval. “ChatGPT hallucinates non-existent citations: Evidence from economics.” The American Economist 69.1 (2024): 80-87.

Which Business Programs Require Economics?

Zachary Bartsch2 Comments

Disclaimer: This post might throw shade.

The vast majority of business majors across the US are required to take two or more Economics courses. You can look across the spectrum. All of the top 20 business schools require two or more econ classes. In fact, Wharton is the top-ranked business school and their business program is actually an *economics* program. They don’t have finance/accounting/business degrees. Instead, they have an Economics degree with the various business concentrations. Again – the top business school in the country is an Economics program.

What about at the other end of the spectrum? I live in Florida. Every single Florida state school requires both Micro and Macroeconomics for business majors. These schools include everything from Florida State University to the local Florida state college down the road. I didn’t look at other state-run higher education systems in other states. There are a lot of states…

I teach at a private Catholic university. We’re listed in something called ‘The Newman Guide’ which recommends 17 Catholic schools. Many of these are liberal arts schools, but the list also includes Catholic University of America, which is an R1. Most of these schools also require two or more Economics classes in their Business major programs. The only exception is University of Dallas, which has Economics in the core curriculum.*

So, overwhelmingly undergraduate business programs across the country require two economics courses. But, why? The students are often not happy to be there, and I’ve even heard business professors demean the math as performatively rigorous and superfluous. They argue that plenty of people get rich or are otherwise successful without all of the quantitative skills that economics leverages.

I think that the fear of math is both a red herring and a scapegoat. Rather, Economics confronts students with the liberal arts – whether they like it or not. Be careful. Liberal Arts are not the same as Humanities. They include argumentation, the ability to write and communicate, clear and consistent logic, and, yes, even math. Accounting can tell you how to keep track of the money, but it doesn’t include a theory for when you should produce more or less in contrast to your competitors. Finance does better since it has the time value of money and ‘with vs without’ analysis. That’s closer to marginal thinking. But finance lacks a theory of markets outside of portfolio theory and arbitrage.**

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The Empire Strikes Back against AI Cheating

Joy Buchanan2 Comments

People are considering whether university evaluations can survive in the AI age. Hollis Robbins wrote on Substack: “How to limit unauthorized AI use in the classroom“

Robbins emphasizes class size and teaching load against the time of an instructor.  An instructor teaching 4 sections with 100 students each is very limited in their ability to monitor and prosecute AI teaching. It’s worse if this instructor is on a temporary contract.

Limited eyes and hands and human attention really are a constraint here, at least for now. Some people see AI tools in the hands of students as the end of education itself.

I have been tweeting my replies to this:

I don’t do remote exams, but I hear about improvements to remote proctoring technology. The arms race is not over.

Technology goes both ways. The phone students were using to cheat are now being marshalled as a “second camera” for remote test proctoring. Instructors are going to largely win this year if they take current technology seriously, for multiple choice and short answer evaluations.

The commercial Respondus program has just added Word extensions. This technology already exists and can run on the students’ laptops.

Right now, a clever student might still be able to shift their carbon-based eyes to a direction where the answer is displayed illicitly. And the instructor’s eyes can only monitor so many eyes. This is all so 2024. This conversation may be over soon. Human students can be placed under the supervision of machine eyes. Right now, we are still dealing with issues of false positives when machines flag students for cheating, but the machines are improving.

I believe that the roads will eventually be dominated by machine drivers and their unblinking eyes. Humans might drive cars for fun in the hinterlands, but it will no longer be considered a serious thing humans to do for work. Monitoring student cheating will become like truck driving. Human eyes are on the way out. We are going to become more cheat-proof than college has ever been before.

As a college professor, that will have implications for my job, although I can imagine a not-completely-negative future. Maybe I could do more fun work with students because the work of proctoring will be handled automatically. I have spent many many hours constructing tests that would be hard to cheat on and watching students take them. I take cheating seriously, and all the faculty at my business school work hard to protect the value of our degree. I predict that this will become a trivial part of teaching within 10 years.

Will students respond with various forms of hacking and deep fakes against such a system? Maybe. So far, in any arms race, Uncle Sam has been winning in the end for a century now.

If there is a will to do so, we could even bring back the research paper by having students work on a monitored computer that does not let them use AI to write. (We could almost do that already, but perhaps the true limiting factor is that, as I like to say, readers are that which is scarce.)

[Credit to my colleagues Art Carden and Anna Leigh Stone who have talked with me about test proctoring this semester.]

Education is a core US export

mdmakowskyLeave a comment

While there is no shortage of examples of willful ignorance and outright lying in politics, the idea that blocking foreign students from attending US universities is anything other than disastrous to US students is positively enraging. The real curiousity here is whether the value of a US degree has yet dipped below the full tuition price tags that foreign students almost always pay. Beyond the billions in tuition received and tuition subsidies indirectly consumed, I couldn’t even begin to put a price on the cultural power accrued from being the global center for higher education for the last century. This administration’s capacity to find new and innovative ways to tear down US institutions is unrivaled and beyond even the grandest dreams of our most optimistic enemies.