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What Is Public Economics?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 06 September 2014
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Public economics is a branch of the field of economics focused on studying the public sector and examining the ways it interacts with the private sector. A variety of topics are covered, including taxation, welfare, and the impact of social policy on economic health. People who study and apply public economics work in financial institutions, colleges and universities, and private think tanks, as well as government agencies, and many possess advanced degrees such as master's and PhD degrees in economics.

This area of economics is concerned with examining the interface between private and public economic activities, and looking at how government policy and economic policy in particular impact the economy as a whole. Topics like government expenditure and investment, different types of governments and their approach to economic issues, and government borrowing and lending are popular topics of research in public economics. This field can include research in the field, as well as analysis of current and historical economic activities.

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Researchers apply economic theories about how people save and spend money, interact with economic events, and respond to political events to their study of public economics. Many economic theories explore the way people use and abuse public resources, like the tragedy of the commons, examining the way the actions of people with access to public resources can ultimately deplete those resources. Interest in the intersections between economics and environmental issues, as well as government policy, is another topic of research in public economics, as government regulation of environmental activities, as well as market pressures from consumers and other businesses, all have an impact on the health of the public sector.

Governments use analysts with skills in this field to develop papers on the ramifications of proposed policy, to determine if the policy should be applied and to develop an appropriate framework for putting the policy in place with a minimum of economic disruption. Economists can also be involved in the planning and development process, taking stated goals from government officials and determining whether they can be turned into a workable policy.

A number of colleges and universities offer coursework in public economics, especially in the case of institutions with an attached school of public policy offering advanced degrees for people who want to work in the public sector. Students generally need to have strong math skills and an ability to grasp complex economic and political theory in order to succeed in such programs.

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SZapper
Post 6

I think it would be so cool to work for a private think tank and do public policy analysis. I already have a lot of opinions about social issues, but I don't have a background in public economics to back up my opinions. I'm sure I would need a lot more school if I seriously wanted to make this happen, but it sounds like an awesome job.

How awesome would it be to basically sit around all day thinking, learning, and debating current issues? And then after you're done, other people actually listen to your analysis! It sounds amazing.

indemnifyme
Post 5

@JaneAir - That's practical, if a bit depressing, advice. I also know quite a few people that are working crappy jobs that have nothing to do with the degrees they paid for. But such is life these days.

Anyway, I don't know a lot about public economics, but this branch sure does sound interesting. I bet the economists they're always quoting in newspapers regarding public policy probably have background and degrees in the economics of the public sector.

JaneAir
Post 4

@burcinc - Honestly, I would hold off on getting a master's, even in public sector economics. If I were you, I would try to get a job in your field first and work for a few years.

The reason I say this is that the job market is really tough in economics. I have a friend who has a bachelor's in economics, and was never able to find a job after he graduated. Now he works retail. So make sure you at least have some career prospects before you invest in more education hoping to get into public economics though.

Not trying to rain on your parade, but these days you have to be practical about the education you get and the potential return as far as jobs.

turquoise
Post 3

@feruze-- Think of it this way -- governments have the responsibility to provide public goods to society. But there are faced with the dilemma of the tragedy of the commons where resources are not enough. This means that it is very difficult to provide everyone in society with the goods that they need and the government needs to allocate them wisely so that everyone benefits. This can only be done with the help of economics.

Plus, sustainable development is usually mentioned as the solution to the tragedy of the commons. And sustainable development is only possible with economic growth.

So it is all tied together. In order to prevent resources from running out and people not having what they need to live, we need economists to helps us so that the economy can keep growing. When there is sustainable development, there will be more resources available for people. So this is very much an economic public policy and of course, environmentalism is included too.

bear78
Post 2

I know about the tragedy of the commons, we had to learn this theory when we were in school. It's the phenomenon where common resources, basically any resource in nature we depend on, is overused to the point where it is either destroyed or runs out.

This idea is generally mentioned when people talk about increasing human population in the world. They say that we don't have enough resources to go around for everyone at the rates in which world population is rising. And not everyone has equal access to these resources either. So a lot of these resources are starting to become unavailable and eventually they will all be unavailable and everyone will be disadvantaged.

I don't really understand what this theory has to do with economics though. I know that common resources is a public policy issue. But what can economists do about it really? It seems more like an issue that policy makers and environmentalists would need to work on. Perhaps economists can help us figure out how much time we have left before some of these resources run out.

burcinc
Post 1

I studied economics as an undergraduate and now I'm considering doing a master's program. I've been confused as to which program I should apply for. Of course, it has to be related to economics because this is the field I want to work in. But I've also been wanting to work on issues that have direct impact on society and government policy.

I wasn't sure what I wanted to do but now after reading about public economics, it sounds like the area I want to work in. I also like that public economics has room for both policy and theory because I think the two are not complete without each other. Public economics sounds like the perfect combination of economics and public policy.

Is anyone studying or working in public economics? Can you tell me a little bit about this degree and jobs in this field?

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