What Is the Difference Between a Degree in Economics and a Degree in Finance?

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There are distinct differences between an economics degree and a finance degree. But there are also significant similarities. While they both concern money and the general economy, they result in fairly different career directions. Finance degrees focus on markets, corporations, and individual finances. Economic degrees can have a very limited focus on either microeconomics or macroeconomics, or you can delve into the wealth of other topics covered by this field, which we discuss in some depth below.

Academic Branches of Finance and Economics


an image accompanying or article on the Difference Between a Degree in Economics and a Degree in Finance

Finance and economics degrees can be divided into major branches. Finance degrees may focus on public, personal, corporate, and government finance. Personal finance manages individual savings, budgets, planning, and risks at the family unit level. Corporate finance revolves around capital structure, managerial accounting, and shareholder value. Public finance focuses on the role of the government’s revenues and expenditures in the economy. It generally teaches students how to become financial professionals in a government agency.


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Economic degrees can focus on national or domestic microeconomics and macroeconomics. Macroeconomics is the broad study of the overall performance of the national or global economy. It deals with topics like:

  • labor
  • income and output
  • economic sector correlations

Microeconomics focuses on how individual businesses and households within an economy allocate, achieve, and manage their resources. A few of the many other fields in which economics can be involved are personal finance, behavioral economics, and infrastructure.

Finance Degrees, In General

These degrees teach students about making, managing, and quantifying money. Students learn about the fundamentals of bonds, commodities, and investment vehicles. Assignments and discussions may cover interest rates, market evaluations, price trends, and risk quantification. Common class topics will be:

  • liability minimization
  • corporate assets
  • accounting with business financial statements

After graduation, students will address key issues that finance managers face every day, such as firm valuation and capital budgeting. There will always be classes on professional ethics, regulatory environments, and corporate social responsibility. For example, a class on corporate finance may introduce students to long-term investment topics. Students will understand how to make the best capital budgeting and structure decisions. These degrees often focus on applied planning, strategic models, and managerial decision-making. After a spell in the professional world, many students who pursue an undergraduate degree in finance often seek a master’s degree in finance or an MBA with a specialization in finance. The master’s in finance is a highly specialized professional degree that can be completed in about a year. An MBA is a multi-year commitment that is more general in its approach to the subject at hand (business), and then the specialization is built onto that framework. 

Economics Degrees, In General

 These degrees will teach students how economics is the financial framework that houses certain political, legal, and social aspects and systems. Economics degrees help students to better understand, analyze, and take action on certain aspects of these interrelationships. Economics is a social science and not a hard science because there are so many variables, and so many of the variables are individuals, who do not always act rationally, so students learn how to use factual observation, academic research, and empirical exploration to produce reliable data and sound reports. Students will understand the various theoretical schools of economic thought, which will help them acquire the analytical, interpretive, and scientific skills needed to become an expert consultant, decision-maker, and thought leader. Classes on macroeconomics will look at concepts like:

  • market structure
  • failure
  • resources

Classes on microeconomics will cover:

  • static models
  • consumer behavior
  • distributive efficiency

But an economics degree will cover a lot more than just macro and micro. Positive economics (“what is”) and normative economics (“what could/ought to be”) comprise a large part of undergrad economics studies as well as the history and current state of economic theory and taking those theories you have learned and putting them into play using applied economics. People who wish to pursue economics as a career can finish their bachelor’s degree and go on to graduate school. A master’s or a PhD is recommended for those who wish to teach the subject at the college level. 

Choosing between an economics degree and a finance degree is difficult for some students because they appear similar. However, some differences can lead to very opposite career paths. But there are also cases of finance degree holders and economics degree holders sharing cubicles and doing very similar work, as these fields also overlap in a few areas. Anyone who likes helping people and companies to manage their money should select a finance degree, while anyone who enjoys analyzing policies and trends should study economics. Readers can further explore business and financial occupations.

Economics and Finance: a Deeper Dive

Called “the dismal science” by detractors, economics can appear to be dry and dusty (calling to mind images of fusty old men in a room calculating GDP and GNP with an abacus), but it can also be critical and lifesaving, in the case of healthcare economics or even areas of personal finance. Economics distills the decision-making process to make the absolute best decision based on available evidence and data. And who doesn’t want to make better decisions? Being able to decide in a reliably methodical fashion is a skill that would benefit all individuals, regardless of their walk of life. 

Personal finance is an area where economics and finance overlap, so we will explore this Venn diagram further to tease out the differences in these two fields. Economics approaches this area as a way to help you make the best decisions with limited resources (spoiler: all resources are limited) and how to navigate complicated systems to your best advantage. People tend to think that economics is all the business of the government and deals with large systems. Still, these people forget that the field of microeconomics exists and that it is expressly for small systems and even individuals. That said, when people need financial advice, they do not start looking at Google reviews on economists in their area; they roll up to the bank and see their helpful financial professional. Economists tend to be employed in the public and nonprofit sectors and by universities. 

The field of finance approaches personal finance from the opposite end. This field tends to represent the banks and their interests, which are sometimes in your personal interests and sometimes not. Financial professionals who specialize in personal finance will help individuals in need of advice, but at the end of the day, the bank signs their paychecks, so be aware of a possible conflict of interest. 

In addition to personal finance, the academic discipline of finance covers two other main areas: corporate finance and public finance. Public finance deals with how taxpayer money is spent. Corporate finance deals with privately-held money and then gives birth to the financial services sector, which allows the movement of the capital from job creator to employee to service provider and so on. There are also financial economics, experimental finances, financial mathematics, behavioral finance, and financial theory as possible other areas of study. 

Financial economics (as implied by the name) is studying the relationship between financial instruments like rates, prices, and dividends and the overall economy (instead of the widgets, say, dog toys, and services, like carpet cleaning, of more traditional economics). Experimental finance researches economic theories and tests their validity through data collection and experimental observations. Financial theorists work with the question of whether finance is a science or more of an art. This debate still rages, so theoretically, (ha!) this field is still hiring. Financial mathematics is the field of applied mathematics that concerns itself with markets and trading. Behavioral finance deals with the decision-making processes of people who work in finance. And people who deal with finances (which would be all of the people). 

Financial experts work in many areas, in the public and private sector. Indeed, criminal justice leadership is a growing area of finance specialization, so just because you have a degree in finance, you need not think you are tied to the banking sector for life. Cities, universities, and non profits will all need individuals focused on the bottom line. 

As we have seen, economics can be concerned with things as they are and things as they could be. This contains the current system, criticism of it, possible improvements upon it, and alternatives to the current system. 

Behavioral economics is also a very interesting field of study that attracts many people. This discipline is marked by the inspection of decision-making by people and institutions and how those decisions and their effects resound with classical economic theory. Since people are not always rational actors, this field draws on psychology and other social sciences as well. Other fields of economics (besides micro and macro) include the following:

  • labor economics
  • developmental economics
  • international economics
  • welfare economics

Economics is decidedly a social science and thus suffers no debate about whether the discipline is an art or a science. Welfare economics is the study of the effectiveness of the allocation of resources by an institution or government. Developmental economics is looking at the sociological-political factors that affect developing economies around the world. The other two on the list seem to be self-explanatory. 

As economics is a social science, if you pursue a bachelor’s degree in this area, one of the first decisions you will make will be to pick a track for your studies. Do you pursue a Bachelor of Arts or a Bachelor of Science in this discipline? The BA will have you study things like the history of the field, involve less technical (math) skills, and generally set you up to be ready to pursue an economic-related career upon graduation. The BS will be more technical and prepare the student for further (graduate) study in the field. 

Some economics-related job possibilities would include the following:

  • data analyst
  • actuary
  • economic researcher
  • financial planner
  • roles in the public sector

The Bureau of Labor Statistics predicts the economic jobs as a portion of the economy will grow by 14% in the next ten years, which is much faster than the national average for all occupations. Strong analytical skills are a must for any position in this field. 

As a major, finance provides fewer options for those starting, and it must be pursued as part of a business-related degree. Schools quantify those in different ways, as a BA, a BS, or a bachelor of business studies (a BBS), depending on their departmental preference and makeup. What matters in pursuing this degree in this discipline is your facility with numbers, your ability to absorb complicated ideas, and your combination of hard skills like math and accounting and soft skills like management and crisis avoidance/mitigation.

In the next five years, finance-related employment opportunities are expected to grow at ten percent (which is a good deal faster than the national average), according to 2016 numbers from the Bureau of Labor Statistics. Some possible career paths for finance degree holders are:

  • budget analyst
  • investment advisor
  • financial planner
  • credit analyst
  • financial auditor
  • insurance underwriter

In-depth knowledge of the needs of the geographic region you serve is expected to be a key desirable skill in prospective employees. 

As we have seen, finance and economics are not mutually exclusive and are both solid paths to secure employment. There is much overlap between the fields, and they complement each other in numerous ways. A financial analyst who sees the larger economic picture would definitely have some benefits. Being an economist with a deep understanding of how policy affects corporate and personal bottom lines would, as well. The final choice resides with you, the student, and hey, there’s always a double major, right?

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