Colander recognizes what I think too many people misunderstand about higher education - including many of the educators themselves - that the value is not in vocation-specific training. Rather, as he notes, the "practical" benefits are in developing skills that are broadly applicable, and as a signal. He writes:
Most administrators and non-economist faculty members attribute that appeal to economics' relation to business. They assume that because liberal-arts colleges don't have business majors, the demand for economics is really just a demand for business. To some degree that's right, but it's only a small part of the story.
As part of a report on the economics major that I am working on for the Teagle Foundation, my students and I conducted a survey of more than a thousand students majoring in economics at more than 30 institutions. We found that only 19 percent of the respondents said that the job-training aspect of the economics curriculum had been very important to their choice of major. Moreover, only 36 percent said they were planning to work in business. The others were planning to go on to professional school or work for a nonprofit organization, or had no specific plans. The reality is that at most liberal-arts colleges, economics is taught as a social science far removed from business.
Companies like to hire economics majors from liberal-arts colleges not because the students have been trained in business, but because they have a solid background in the liberal arts. What I hear from businesspeople is that they don't care what a job candidate has majored in. They want students who can think, communicate orally, write, and solve problems, and who are comfortable with quantitative analysis. They do not expect colleges to provide students with specific training in business skills.
If the economics major's popularity is not due to its intellectual dynamism or connection to business, to what is it due? I suspect a mundane explanation: It is the "just right" major. By "just right" I mean that the economics major provides the appropriate middle ground of skill preparation, analytic rigor, and intellectual excitement that students look for in a major, and that employers look for when hiring students.
Consider the results of another question in my survey. We asked economics students to identify majors as hard, moderate, or easy, and we found that 33 percent viewed economics as hard, 3 percent said sociology was hard, 7 percent saw psychology as hard, and 13 percent thought political science was hard. Since other social sciences were the primary alternative majors that most of the economics students considered, that data is compelling evidence that the respondents perceived those other majors as too easy. Students likely reasoned that taking a "too easy" major would signal to potential employers that the student had chosen an easy path through college, thereby hurting their chances of being hired.
Of course, as I've argued before, the real value is not practical at all, but rather that education can help us live "wisely, agreeably and well" (as Keynes put it in "Economic Possibilities for our Grandchildren").