In addition to business studies, sociology, and law, economics was one a core disciplines when the Johannes Kepler University Linz was established in 1966 (under its initial name University for Social Sciences, Economics and Business). This was an era marked by a growing interest in social and economic research in the hopes that the insight would contribute to better economic development and strengthen society as a whole. To date, this particular focus on applicability of both theoretical and empirical work by members at the Department of Economics reflects this intention.

During the first decades, the department’s activities were strongly influenced by its founding professor, Kurt Rothschild, who retired in 1985. His ideas and policies were shaped during his long stay in Great Britain and he felt it was very impoprtant to apply accurately precise scientific methods, something that at that time could not be taken for granted at economics departments in Austria on account of a great exodus of scholars and researchers during the Nazi-era.

Research at the department has always focused on empirical studies related to labor market problems, as is documented by two large studies financed by the Austrian Science Fund, namely “The Labor Market and Unemployment” (headed by Rothschild together with Gunter Tichy at the University of Graz), and “The Austrian Center for Labor Economics and the Analysis of the Welfare State between 2008-2014", headed by Rudolf Winter-Ebmer. In addition, there have been numerous other important research studies relating to various fields, such as International Economics and Public Economics, among many others.

The department's success can also be attributed to the large number of successful graduates in economics who work professionally in various areas that include economic research institutes, ministries, economic chambers, banks, firms, international organizations, etc. Many of these graduates hold leading, influential positions. Many alumni and past employees have gone on to become outstanding researchers, or have been appointed as professors at renowned universities, such as in Zurich, Munich, Bayreuth, Innsbruck, Vienna, or Linz.