Economics has long been called the dismal science. The general economic outlook today is indeed dismal, but that doesn't mean job prospects in the field are. "There is no unemployment among Ph.D.'s in economics," declares John Siegfried, a Vanderbilt University professor. Just do the math, and you'll see why: In the current academic year, the American Economics Association has listed approximately 2,200 job openings worldwide—but U.S. universities will grant only 950 Ph.D.'s in economics.

Universities themselves may cut back, but economists remain in demand in government, business, and nonprofits and as consultants or policy analysts. "Depending on the program, about half the graduates stay in academics, and the other half go into the private sector, government, or places like the World Bank or International Monetary Fund," says William Collins, director of graduate studies in economics at Vanderbilt. Some of the most famous economics Ph.D.'s straddle both worlds; think of Fed Chairman Ben Bernanke, New York Times columnist and Nobel Prize winner Paul Krugman, and Obama advisers Christina Romer (who will chair the White House Council of Economic Advisers) and Laura D'Andrea Tyson.

But economics has applications in many fields, as evidenced by a growing interest in the intersections with other disciplines. Vanderbilt's Law School, for instance, offers a J.D.-Ph.D. program. "That program is centered in the law school, but we collaborate on the courses," says Collins. Schools of public policy and public health also see common ground: At Montana State University, students can earn master's degrees in applied economics in agricultural or natural resources. And some graduate engineering programs offer extra training in economics, according to Wendy Stock, head of the economics department at Montana State.

Behavioral economics—the place where human behavior and psychology meet the marketplace—is also increasingly influential and popular, says Botond Koszegi, associate professor of economics and chair of graduate admissions at the University of California-Berkeley: "It used to be more of a niche or contrarian field, but now it is more mainstream." This field uses the discipline of economics to study "how people really make decisions," says Berkeley Ph.D. candidate Matt Levy. His research addresses cigarette addiction and the ways in which new smokers underpredict the long-term cost of smoking for finances and health. Says Levy: "One of the important questions that people in behavioral economics ask is, can we come up with interventions that will help people make better decisions?" Jonathan D. Rose, another Ph.D. candidate at Berkeley, has been studying the 1930s—"the last time we had a mortgage crisis like this," he explains.

Playing catch-up. American students may be surprised to find that many international students have an easier time in the first year or two of the Ph.D. program. That's because of the concentration on mathematical and quantitative skills, which are often a strong point of foreign applicants. At Berkeley, for instance, Koszegi observes that most international applicants already have a master's in economics, while most American applicants do not. "But the Americans catch up very quickly," says Koszegi.

Montana State's Stock has a similar observation: "The jump from an undergraduate to a Ph.D. program is very large, and it's my impression that this is more so in economics than in other disciplines." She advises anyone contemplating a Ph.D. program to go for a master's first. "That would give you extra training, more exposure to the core of the discipline, and comfort with conducting independent research," she says. It will probably also raise your scores on the GRE—a key factor, since the median quantitative score for those accepted into Ph.D. programs is 100 percent. Jackie Haines, a senior majoring in economics at Montana State, is following Stock's advice, hoping to "be competitive and excel" by entering the M.A. program next year and applying for Ph.D. programs after that.