How the University of Pennsylvania’s Master of Applied Economics and Data Science prepares data-driven economists

Ivy League Program Forges Data-Savvy Economists for a Rapidly Evolving Job Market

In an era where data reigns supreme, the traditional economist is undergoing a profound transformation. The University of Pennsylvania's Master of Applied Economics and Data Science (MAEDS) program is at the forefront of this shift, equipping students with a potent blend of economic theory and cutting-edge data analytics to tackle the complex challenges of the modern world.

Bridging the Theory-Practice Divide

Mike Lipsitz, the Executive Director of the MAEDS program, witnessed firsthand the growing chasm between academic economics and the practical demands of the professional landscape. His own journey, from a curious student of mathematics and economics in Connecticut to a PhD holder from Boston University and a stint at the Federal Trade Commission, underscored a critical need.

Lipsitz observed that while employers increasingly sought individuals who could apply economic principles to real-world problems, university curricula often lagged behind. This realization fueled his ambition to create a program that would bridge this gap, empowering young economists with the tools for immediate and impactful contributions.

“I was excited to provide young economists with the tools to make immediate, meaningful contributions in economics and data science,” Lipsitz shares, highlighting the program's core mission. The MAEDS program, housed within the University of Pennsylvania's highly-regarded Department of Economics, is designed to be that crucial bridge.

A Structured Pathway to Data Science Mastery

The MAEDS curriculum is meticulously crafted with the contemporary workplace as its guiding star. Technical proficiency is woven into the fabric of the program from its inception, beginning with the foundational course, "Computational Methods for Economists."

Here, students dive deep into the essential programming languages that dominate the professional sphere. "Students learn advanced coding skills in languages like R and Python — languages broadly used in the workforce," Lipsitz explains. The curriculum also introduces them to vital collaboration tools like GitHub, a platform integral to modern software development and data management.

This early exposure to multiple languages and platforms is a strategic advantage. "Exposing students to multiple languages and platforms better prepares them for the realities of the job market," Lipsitz emphasizes, ensuring graduates are not just theoretically sound but practically equipped.

The Cutting Edge of Economic Analysis

Beyond foundational coding, the MAEDS program ventures into the realm of advanced analytics with "Machine Learning for Economists." This course delves into the sophisticated techniques that are revolutionizing how economists and data scientists approach intricate business and policy issues.

Students explore areas such as natural language processing, deep learning, neural networks, and the burgeoning field of large language model (LLM) agents. The program aims to demystify these powerful tools, fostering a nuanced understanding of their capabilities and limitations.

“The course will teach students the strengths and limitations of AI, and how it can be used to enhance problem-solving and create efficient workflows,” Lipsitz notes. Graduates will be adept at leveraging modern AI workflows, including the design and deployment of AI agents, positioning them as leaders in data-driven decision-making.

Solving Real-World Economic Puzzles

The MAEDS program's commitment to practical application extends across all its courses, with a consistent focus on equipping students to solve complex economic and business challenges. In "Applied Microeconomics I," for instance, students engage with both theoretical frameworks and practical tools.

Lipsitz explains that the course aims to "describe the shape of markets and predict consumer and firm behaviour," providing a tangible understanding of microeconomic forces. This theoretical grounding is then put to the test in subsequent courses that tackle the critical question of causality.

Unraveling Causality with Econometric Rigor

The "Econometrics II" course confronts a fundamental challenge in economic analysis: how to definitively establish cause-and-effect relationships. Lipsitz illustrates this with compelling real-world examples, such as the famous World War II aircraft case.

He recounts how an initial analysis of damage on surviving aircraft, concentrated on wingtips and fuselage, led to a flawed conclusion. The critical insight was recognizing this as "survivorship bias," where only the planes that made it back were studied. Counterintuitively, the data suggested that reinforcing areas with little or no damage was the correct strategy.

“That is why in 'Econometrics II,' we will consider several econometric techniques that allow economists to reach correct causal conclusions by working around survivorship bias and other common data issues,” Lipsitz states, underscoring the program's dedication to rigorous, data-informed inference.

Harnessing Global Economic Data

Dirk Krueger, a distinguished Professor of Economics at the University of Pennsylvania, brings the world of macroeconomics to life in his "Applied Macroeconomics I" course. Students in his class gain hands-on experience with vast repositories of economic data.

They work with datasets from sources like the Federal Reserve Economic Data (FRED), which houses hundreds of thousands of economic time series. Further exploration includes historical development data and the Penn World Tables, offering a global perspective on economic indicators and national accounts.

Krueger emphasizes the necessity of computational methods in modern economic modeling. "Dynamic economic models and their applications, even simple ones, often require numerical techniques to be solved," he notes. While his course prioritizes intuition, it also introduces students to the numerical approaches needed to solve, simulate, and apply dynamic consumption, investment, and general equilibrium models.

Communicating Complex Insights

Beyond the technical ability to analyze data, the MAEDS program places immense value on the art of communication. "While it is not difficult to explain what the average value in a dataset is, as the statistical concepts at play become increasingly complex, so too does communicating what those concepts mean for a non-technical audience," explains Krueger.

The program's pedagogical approach is designed to bridge this gap. By integrating economic theory with data science and emphasizing how analysis solves practical problems, the MAEDS faculty aims to cultivate graduates who are not only skilled analysts but also effective storytellers.

“We seek to train students who are masters of understanding and explaining the intuitive economic story that the data tells,” Krueger adds, highlighting the program's commitment to developing well-rounded, impactful economists.

Access to a Powerful Professional Network

Graduates of the MAEDS program emerge with a distinctive combination of deep economic understanding and advanced data science expertise. This formidable skill set is further amplified by the extensive network and resources available through the University of Pennsylvania.

Lipsitz points to the invaluable connections within the university's alumni community. "It includes economics alumni from the university's undergraduate and PhD programs, many of whom now work at leading consulting firms, financial institutions, and other major organizations," he shares.

The presence of the Wharton School, globally recognized for its business education, further enhances these connections. "Additionally, the Wharton School is widely known as one of the best business schools in the world, with connections that penetrate many renowned financial and business institutions," Lipsitz notes.

Navigating the Career Landscape

As students approach graduation, the university's dedicated Career Services provides robust support to help them navigate the competitive job market. Tools like CareerExplorer empower master's students to explore diverse career paths and identify where their newly acquired skills can lead them.

Personalized guidance on applications, interview preparation, and professional development ensures that students are well-prepared and confident as they embark on their job searches. This comprehensive support system underscores the program's commitment to student success beyond the classroom.

The MAEDS program represents a forward-thinking approach to economics education, preparing students not just for jobs, but for careers where they can drive innovation and shape economic understanding in an increasingly data-driven world. The integration of rigorous economic theory with practical data science skills, coupled with access to a world-class network, positions its graduates at the forefront of the field.