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Economic studies as a profitable investment

Listening to conversations on the bus or at the café, or even watching children play, we may have an impression that everyone is good at economics. At least everyone talks about it. They grumble about high prices, increasing taxes and shortage of motorways in Poland. They complain of low pension. Conversations are full of advice for politicians (‘they had better lower their remuneration, instead of stealing money from our pockets’ or ‘instead of talking about nothing, they had better do something to make people lives easier’). If everyone talks about economics, then it is certainly an important sphere of the social life. Is it possible to learn it only during studies, or the café conversations are enough for that? Why do we have to study economics then?

In order to answer the question, why to study economics, it is worth answering the question first, why we should study. Study anything. Certainly, different people study for many various reasons. Some of them want to acquire knowledge, which makes them the graduates of the university smarter than the high school graduate. The cause of that might be the university alumni’s better preparation to enter the labour market and generally speaking, more difficult, because changeable environment. The reason why people study may be their curiosity for world and interest in some of knowledge. It also happens that someone simply likes to study or the fact of studying results from willingness to continue the family traditions. Some others study in order to satisfy their ambitions or expectations of other people (often parents, who plan their offspring’s future many years in advance). Many decide to study for social reasons: ‘if all my friends study economics, then I will choose economics as well’.

However, the university diploma is also a commodity, which employers want to pay for (sometimes even quite a lot). The university graduates are valuable from the employer’s point of view for at least two reasons. First of all, they usually have the expert knowledge in the field of their studies and which they need to perform their duties. This is an obvious reason and we will return to it later considering advantages of studying economics. However, now we will concentrate on the second reason, which inclines employers to hire rather a university than a high school graduate. That first one indicates having a certain set of traits essential from the employer’s point of view. What is more, we should include the ability to acquire knowledge as well as to learn and capture the matter fast, which is not necessarily very interesting, often difficult though. It can be naturally expected that if needed these skills will be put to good use in everyday work. The other trait of the alumni is their ability to resign from the immediate profits, which is earning money right after graduation, in order to first invest in their own knowledge (in this context we often speak about the investment in human capital), and only in the future gain return on the investment, which is higher salary. Anyone, who studies, shows that is not afraid of risk related to e.g. uncertain future economic situation, especially on the labour market. They demonstrate their faith in their intellectual abilities as well as capability to accomplish long term skills. They show they can work persistently and, therefore, expect that the effectiveness of their actions will be higher than other candidates’ (they will not e.g. either overuse doctor’s certificates or shirk).

The university graduates certainly confront the necessity to work in team. This trait is also valuable from the employer’s point of view. We may expect that the graduates know how to match co-workers in order to optimise the effects of team work (or minimize the expenditure to accomplish a certain goal or maximize the achieved effect, bearing certain costs). They surely can also better control and evaluate the actions of co-workers and motivate them to work effectively than high school graduates. They can organize work they way to avoid stoppage and delays, and if that occurs, they know how to minimize its negative results. They can deal with changeable conditions at work and solve unusual problems.

The university graduate is able to speak and write on the subject ordered by the employer. Students of all fields of study are additionally taught foreign languages in the range beyond the school education programme, which is often useful as the business activity is becoming more and more international.

It results from the above, that the mere fact of potential employee’s graduation is often very important for the employer, whereas the specialty of studies seems to have less meaning. The graduate of history or political science may be as good head of human resources department as an engineer. And an astronomer can be successful as an analyst in an insurance company.

Potential candidate’s qualifications certified by the diploma are valuable not only to the employer, but also (and even above all) to the mere candidate. By having a diploma they show to all potential employers that they have positive traits distinguishing them from other candidates to be employed. What is more, they indicate their qualifications to different potential employers.  They are not attached to the narrow professional specialty, but have a general knowledge, useful on many different positions in various branches of the labour market. Their ability to learn lets the employer expect that they will easily acquire the specific knowledge, useful on the certain position, right after having taken up a job.

However, it is not that the employer is interested only in the candidate’s skills and qualifications indicated by the university diploma. This way we refer to the first reason why the employer chooses the given university graduate of a certain major. The employer wants to know the candidate’s knowledge as well. It is not only about their general knowledge, but above all their specific (one could say even ‘technical’) knowledge regarding certain types of business activity. Let’s analyse in details then, why to study economics?

During the economics studies one can acquire wide range of skills useful in professional life. What are these skills? Various, depending on the stage of studies. Let’s look into them. We must remember that currently studies are divided into Bachelor Studies (1st degree) and Master Studies (2nd degree at SGH).

We will start the analysis of the acquired skills by the students of economic studies from researching methods, which students of the 1st degree studies learn (with regards to the article’s limitation, we make a subjective selection of these methods).

During micro- and macroeconomics courses as well as the following ones researching the elements of the economy in details (e.g. finance, economic policy etc.) students become familiar with the standard problems and methods to solve them (how to maximise profits? how to minimise costs? how to fight with inflation? how to prevent monopolisation? how to protect consumers from buying junk products?). This way they acquaint themselves with the mechanisms of the economy. Wherever they find job after studies, let’s say in the Community Council, Ministry, foundation or enterprise, always making decisions in this field, they will remember about the broad context of their actions described by means of mechanisms learned at the beginning of their economic studies.

By learning the basics of economics and its components, students additionally acquaint themselves with the specific problems, which the households, enterprises, public institutions as well as the whole national and even world economy face. This way they get to know different forms of economic activity and its influence on non-economic environment. They begin to understand why so much is said about the shale gas deposits in Poland today. They know why the diamonds are more expensive than glass. They realise that the explosion of the Icelandic volcano has influence on the employment rate in the Polish service industry.

Whereas by learning mathematics, students of economic majors become acquainted with the analytical methods essential to solve specific economic problems. For example, they learn to apply derivatives not to investigate the function, but to optimize the production or the price level. Looking at the negatively sloping line, they see the aggregate demand curve. They start to understand the relation between the slope and budget tax receipts. They know that the demand for apples is much more elastic than demand for rail travel and know the influence of these differences on the possible price strategies of the producers. 

Statistics and econometrics let us connect various information about the economy and on its basis describe the past and the present as well as forecast the future. Knowing e.g. the behaviour of the economies of different Euro zone countries in the economic crisis, we can predict, what will happen in the Polish economy after the introduction of the common European currency.

Various types of management (e.g. human resources, capital or knowledge management) introduce students to the techniques of dealing with specific problems in team work and equip them with standards of conduct in the typical situations, and at the same time showing the patterns of behaviour in the atypical situations. The analysis of different forms of enterprise (profit centres, cost centres, parent companies, subsidiaries, local and multinational companies, general partnerships or public limited liability companies) lets us indicate the usability of the particular solutions in the specific sectors of the economy.

Usually only the first semesters of different economic fields of study are similar. That is how we create a fundament to develop various specialties. Economics (including the separated in Poland management and finance fields of study) is a very well developed field. What is more, it is tightly related to non-economic spheres of social life, that is, e.g. politics or culture. Students of 1st degree of economic studies should already be acquainted with these relations and know how to make use of them to increase the effectiveness of the economic activity.

In the course of the further economic studies, that is during the last semesters of 1st degree studies as well as during 2nd degree studies, students get to know with the other methods useful in the professional life. At this stage, they are not basically aimed at understanding, how the economy and its sectors function, but more specialised and necessary to work on the specific positions in the economy and beyond it. The very end of 1st degree studies gives students the opportunity to learn the variety of the matter defined as economics and choose that element which is most interesting to them and gives them the best chances to be successful in the labour market. Therefore, this is not only a preparation to work as a novice economist, but also a preparation to develop the knowledge during 2nd degree studies.

2nd degree studies (Master Studies) are of different nature than 1st degree studies. They are not as unitary as 1st degree studies. However, students do not build basics of  economic knowledge, but develop specialties. Students of different economic fields of study (e.g. finance and accounting, management or international economic relations) have greater freedom to select the fields they want to study, i.e. greater freedom to select certain courses, than the students of 1st degree studies.

Some students include every subject concerning e.g. mechanisms of economic integration and operation of the European Union in their study programme, preparing for work in the Union’s structures, institutions, which subject of the activity regards European integration, or companies operating in the European Union. Others deepen their knowledge in corporate finance, learning accounting as well, as they want to establish their own company or work in a corporation in the future. Some others arrange their program of studies according to their future job as a tax advisor or real estate agent.

Certainly improvement of specialist knowledge does not mean that students forget the basics of economics. At this stage of studies they can, however, make use of this knowledge to run their own economic analyses. They can select analytical tools to solve a specific problem. They should also manage to construct simple economic model, which is a simplification of the economic reality, and run an empirical test verifying model predications. Skills of the graduate of 2nd degree economic studies are the combination of the general economic knowledge as well as detailed knowledge. That makes them great candidate for a valuable worker both in the corporation and economic department of a public institution or international organisation.

Polish economy openness and its better and better integration with the other European countries economies as well as the whole world opens up new vistas for the future economists and should be an extra argument encouraging to study economics. We live in more and more unified world. Consumers in the most countries in the world, especially in the industrialised ones, behave quite similar. Everyone buy more, when the prices decrease or when their income increases. The prevailing majority prefers diversity than uniformity (we wear different clothes, not like the soldiers of the Chinese army). Many purchase products of famous brands, being afraid of buying products of unknown origin. As a consequence, many principles of economics learned at the Polish university will be useful to the worker of a research institution, company or institution in GermanyFrance or USA as well. After all, we debit or credit similarly regardless of the transaction currency…

 

Elżbieta Czarny

 

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