Economists' economic behavior
Congrats to you who are an economist! "Economists have a lower risk of ending up with unpaid debt", says Kristoffer Balle Hvidberg from CEBI. The explanation? Well, it is not a difference in salary. It has to do with behavior.
“The interesting thing is that there is actually no difference in income between the people I compare. If you look at law and economics, for example, both subjects have a high starting salary, but the results show that economists are less likely to get into financial difficulties,” Kristoffer explains when asked about the new results from his PhD dissertation.
In his research project Kristoffer examines the finances of a large group of Danes who have applied for education between 1993 and 2006. 11% of them have defaulted on a loan. And those studying economics face only half the probability of not being able to pay loan debts - not because they have a higher salary than candidates from other disciplines but because they have different economic behavior.
Pushed towards economics
Kristoffer has studied people who prioritized other fields of study than economics but weren’t admitted to their first priority because of their grade point average.
"They are interesting to study, because they are applicants who are pushed to study economics" says Kristoffer.
By comparing candidates around the grade point threshold and thus both those who were admitted to their priority outside economics and those who were pushed to study economics, Kristoffer can derive the impacts of studying economics in relation to another education.
“Almost three out of four of the students I looked at have had a social science subject or law as their first priority. But there are also some who, for example, would like to enter medicine or teacher training,” he says.
Read Kristoffer's paper behind this story Field of Study and Financial Problems: How Economics Reduces the Risk of Default here