How Unnecessary College Degree Requirements Hurt The Working Class

Many jobs which were open to high school graduates a generation ago now require a college degree.

Photo by Christiann Koepke on Unsplash

Key Points

• Rising employer demand for bachelor’s degrees in occupations which did not previously require them is called degree inflation.
• Degree inflation closes job opportunities to the 62 percent of Americans without four-year degrees, exacerbates labor shortages, and reduces the financial return on investment of a college education.
• The proportion of upper-middle-class workers— those earning between $60,000 and $80,000 in today’s dollars — with a bachelor’s degree rose from 38 percent in 1990 to 52 percent today.
• Managers, registered nurses, computer software developers, salespersons, and secretaries have experienced the most degree inflation since 1990.
• To address degree inflation, state governments should eliminate statutory degree requirements wherever possible. The federal government should ensure a level playing field between traditional colleges and alternative education providers.

Executive Summary

Many American workers find themselves “running faster just to stay in place.” In many occupations, employers require bachelor’s degrees for jobs that required only a high school degree a generation ago. This phenomenon, known as degree inflation, threatens to close off millions of middle-class job opportunities to the 62 percent of American adults without a four-year degree. Degree inflation may also exacerbate labor shortages and reduce the return on investment of a college degree.

An extensive body of research shows that employers have added degree requirements to job postings in recent decades, with a marked uptick after the Great Recession. In some occupations, a majority of job postings request college degrees even though most workers currently in those occupations do not have degrees. One study figures that degree requirements have increased by 60 percent since 2007, even after controlling for changes in the types of jobs available.

The result is that many occupations that had been open to workers with only a high school diploma are now unavailable to the majority of the population. In 1990, just 9 percent of secretaries had college degrees; that proportion has since nearly quadrupled to 33 percent. In other occupations where college degrees were common but not required, such as registered nursing, a four-year degree is quickly becoming a de facto prerequisite.

This development might be benign if workers’ higher levels of education translated into higher salaries. But rather than generating a broad increase in earnings, degree inflation has simply caused the education levels of lower income brackets to rise. The share of workers earning between $40,000 and $60,000 with a bachelor’s degree or higher increased from 26 percent in 1980 to 38 percent today.

To identify the occupations most responsible for overall degree inflation, this report introduces the “excess degrees” metric, which takes into account the increase in education levels within each occupation since 1990 and each occupation’s overall importance to the economy. By this metric, the five occupations driving degree inflation to the greatest extent are: managers and administrators, registered nurses, computer software developers, salespersons, and secretaries.

Employers should lead the fight against degree inflation by relaxing degree requirements for open jobs wherever possible, which will open up new opportunities for workers without college degrees and make job openings easier to fill. This is already occurring to some extent.

Changes in public policy can also fight degree inflation. At the state level, governments should remove degree requirements from public-sector jobs and licensed occupations, wherever possible. The federal government can also help by allowing alternative educational pathways to access the same funding streams as traditional colleges, as well as treating college-degree requirements similarly to other employment practices with respect to nondiscrimination law.

A college degree should not be a requirement to enjoy a middle-class standard of living. But private-sector initiative combined with smart policy changes can begin to turn degree inflation around.

Introduction

“Here, you see, it takes all the running you can do, to keep in the same place,” the Red Queen tells Alice in Lewis Carroll’s Through the Looking-Glass. American workers can empathize. Many job seekers must complete more and more years of postsecondary education to qualify for positions that required only a high school diploma thirty years ago. Like Alice, workers must run faster just to stay in place.

In most occupations, the share of workers with a bachelor’s degree or higher has steadily ticked up over time. Today, 73 percent of registered nurses have at least a four-year degree, compared to just 46 percent in 1990. In some jobs that were formerly the province of workers with no education beyond high school, such as secretaries and administrative professionals, employers are increasingly asking new hires to hold a college degree.

Degree inflation — the phenomenon of rising employer demand for higher education levels in jobs that did not previously require them — has been a feature of the labor market over the last several decades. While degree inflation can refer to any increase in education requirements for a given job, the most salient aspect of degree inflation today is the trend of employers demanding bachelor’s degrees for jobs which previously required less education.

In 2017, the Harvard Business School report Dismissed by Degrees by Joseph Fuller and Manjari Raman opened the business world’s eyes to the phenomenon. Using a massive dataset of online job postings, Fuller and Raman quantified degree inflation. They found that 67 percent of job postings for production supervisors requested a college degree, even though only 16 percent of current workers in those jobs had one. A similar dynamic existed for many other middle-class jobs. The authors figured that degree inflation could eliminate up to six million job opportunities for people without four-year degrees.

The conclusion of Dismissed by Degrees was clear: employers are demanding college degrees for jobs that individuals without degrees are doing today.

Rising awareness of degree inflation, plus a tight labor market, led many employers to drop degree requirements for middle-class jobs after 2017. A 2022 Burning Glass Institute report, The Emerging Degree Reset, leveraged an updated job postings dataset to show that bachelor’s degree requirements disappeared from millions of job postings. By 2020, the share of postings for production supervisors that requested a bachelor’s degree had dropped to 33 percent. The authors estimated that “an additional 1.4 million jobs could open to workers without college degrees over the next five years.”

While job postings data is useful, it may not reflect employers’ actual hiring practices. Instead, this report analyzes trends in degree inflation over the past three decades, using data from the U.S. Census and the American Community Survey to observe how the education levels of workers in various jobs have changed over time. In most jobs, the share of workers with at least a bachelor’s degree is higher today than in 1990. Moreover, degree inflation does not appear to have slowed since the 2017 publication of Dismissed by Degrees, despite employers’ efforts to excise degree requirements from job postings.

In addition to quantifying degree inflation, the report qualitatively analyzes several jobs that have experienced significant degree inflation and finds that the justification for increased education requirements is thin. The report concludes with five policy recommendations that federal and state governments should adopt to slow or even reverse degree inflation.

How degree inflation harms the working class

Degree inflation harms Americans, especially those below the median income and those without four-year degrees. There are three main channels through which the phenomenon hurts the working class and reduces economic efficiency: it closes job opportunities for workers without degrees, exacerbates labor shortages, and reduces the financial return of a college education.

Degree inflation closes job opportunities

Not everyone is able to complete college. Students who are less prepared academically, such as those with lower standardized test scores and lower high school GPAs, are much less likely to enroll in college. Less prepared students who do enroll are less likely to complete their degree. This relationship holds even after controlling for socioeconomic status and other factors. The substantial cost of college, in both money and time, also dissuades or prohibits some students from pursuing postsecondary education.

People without a four-year college degree are often intelligent and hardworking, but for various reasons are simply not in a good position to earn a bachelor’s degree. According to Census Bureau data, 62 percent of Americans over the age of 25 do not have a bachelor’s degree. When degree requirements for jobs increase, these individuals find themselves shut out of good middle-class career opportunities.

A study by Peter Blair, Papia Debroy, and Justin Heck finds workers without bachelor’s degrees face employment penalties at every stage of their careers. The authors’ analysis shows that between two workers doing the same job today — one with a bachelor’s degree and one without — the college-educated worker is far more likely to transition to a new job requiring a similar skill set but paying better. In other words, a worker without a degree faces a “paper ceiling” compared to a college-educated worker, even if the two workers are doing the exact same job requiring the exact same skill set.

The opportunity gap between workers with and without degrees “does not appear to be driven by differences in human capital,” the authors conclude, but is rather “the result of an intrinsic preference for the bachelor’s degree credential itself by employers.”

Degree inflation exacerbates labor shortages

If employers require a bachelor’s degree for jobs where a degree is not necessary to perform the duties of the job, they artificially shrink the pool of potential job candidates. Job openings take longer to fill, which is especially problematic during today’s unprecedented labor market tightness. Degree requirements also cause employers to overlook plenty of talent: job candidates without degrees, but with other relevant experience, may bring new and diverse perspectives to the job.

Extreme labor shortages should eventually cause employers to reconsider unnecessary degree requirements. But sometimes governments impose degree requirements, meaning employers cannot hire job candidates without degrees even if they want to. A study by V. Joseph Hotz and Mo Xiao shows that when states impose minimum education requirements on child care workers, the number of operational child care centers shrinks.

This isn’t just bad for prospective child care workers without the requisite education. If firms cannot hire the workers they need, they will be unable to expand supply to meet rising demand. The result for consumers will be shortages and price increases. This is especially true for labor-intensive services like child care, which has increased in price faster than overall inflation, and which many working families struggle to find.

Degree inflation reduces the return to college

On average, earning a bachelor’s degree pays off financially. The typical four-year college graduate earns 65 percent more than the typical worker with only a high school diploma. But that average is misleading, as there is substantial variation in the return to college. Many graduates do not work in jobs that pay college-level salaries, and so struggle to earn back the cost of tuition. According to FREOPP’s estimates, 16 percent of bachelor’s degrees do not increase students’ earnings enough to justify the cost of college, even before accounting for the risk of dropping out.

Degree inflation is one reason that the financial return to college sometimes disappoints. Many college graduates must work in jobs that do not require a college degree, simply because the number of college-level jobs hasn’t kept up with graduations.

Research by Burning Glass Technologies and the Strada Institute estimates that four in ten recent college graduates are underemployed, meaning they have a job where a college degree is not strictly necessary to do the work. Underemployed college graduates face a significant earnings penalty: they earn just $37,330 per year, compared to $47,470 for college graduates in jobs where degree requirements are more justified. Most disturbingly, underemployment persists: two-thirds of college graduates who were underemployed in their first job remain underemployed five years later.

If students must bear the costs of college — including tuition and time spent out of the labor force — but then land jobs paying non-college salaries, the likelihood that they will earn back the cost of college diminishes. According to American Community Survey data, the college earnings premium has been flat since 2007 even as tuition has risen. Rising costs and stagnant returns also makes student loan repayment more difficult. While college promises economic mobility, the slow creep of college graduates into non-college jobs means it’s a false promise for many.

Quantifying degree inflation

Degree inflation is impossible to understand without considering the supply of college graduates. During the 1980–81 academic year, colleges and universities awarded 935,000 bachelor’s degrees. That rose to 1.09 million degrees in 1990–91 and 1.24 million in 2000–01. However, since the U.S. population was also rising during this period, the number of bachelor’s degrees awarded per capita remained relatively flat.

College enrollment takes off

College enrollment began to accelerate around the turn of the century. Federal aid to college students became more generous throughout the 1990s and 2000s. Congress expanded eligibility for student loans, hiked the maximum Pell Grant several times, and created new tuition tax credits. These federal subsidies goosed demand for college credentials.

The Great Recession also caused widespread unemployment, which increased demand for college. The slack labor market led would-be workers to take refuge in higher education, since few job opportunities were available. As a result, bachelor’s degree conferrals rose to 1.72 million in 2010–11 and exceeded 2 million by 2020–21. As a share of the population, conferrals rose by more than 50 percent between 2000–01 and 2020–21. Colleges also granted more two-year degrees and graduate degrees.

Whereas only 21 percent of the population ages 25 and older had a four-year degree in 1990, by 2022 that share had risen to 38 percent. The rising supply of college graduates might be beneficial if the number of college-level jobs had increased at a commensurate rate. Ideally, a college degree helps workers become more productive, thereby allowing them to command higher salaries.

But while workers are earning more degrees, this does not always translate into a job that pays more. This becomes apparent when comparing the education levels of workers in the same real earnings brackets over time.

The share of workers with a bachelor’s degree or higher has increased for all real salary bands. In 1980, just 31 percent of workers earning between $60,000 and $80,000 (in today’s dollars) held a bachelor’s degree. That proportion increased to 39 percent in 2000 and 52 percent in 2021. In fact, a worker earning between $40,000 and $60,000 today is about as likely to have a bachelor’s degree as a worker earning between $60,000 and $80,000 in 2006.

Workers are earning more degrees, but the degrees are not necessarily helping them move into higher income brackets. Among middle-class workers, a college degree used to be the exception. Now it is close to becoming a norm.

The impact of the Great Recession

The Great Recession of 2007–09 had a double impact on degree inflation. First, the recession increased the number of people attending college. Second, the weak labor market allowed employers to become more choosy about which job candidates they hired. The result was new college degree requirements for millions of jobs that did not previously have them.

A study by Alicia Sasser Modestino, Daniel Shoag, and Joshua Ballance examines degree requirements in job postings between 2007 and 2010, during and immediately after the Great Recession. The researchers find that a one percentage point increase in the unemployment rate increases the share of job postings requiring a degree by 0.44 percentage points. While some of the increase was cyclical — meaning employers dropped some degree requirements once the labor market tightened — the majority of the change was structural. Even as the economy recovered, degree requirements remained at an elevated level.

In a follow-up study, Modestino’s team found that 40 percent of jobs experienced “persistent upskilling” after the Great Recession, meaning employers raised degree requirements permanently after the downturn. This was concentrated in occupations where a substantial portion of workers already held four-year degrees. It seems that employers took the opportunity to further close these roles to workers with less education.

By 2019, the share of job postings specifying a bachelor’s degree increased by 60 percent relative to the pre-recession status quo, according to a study by Peter Blair and David Deming. The finding remains even after accounting for changes in the sorts of jobs available. “Demand for education has remained persistently higher a decade after the Great Recession,” the authors conclude.

Which occupational fields are experiencing degree inflation?

Most existing studies of degree inflation look at whether employers request college degrees in online job postings. This is a valuable source of data. However, job postings may not reflect employers’ actual hiring practices. Some employers may have a “soft” preference for bachelor’s degrees and refuse to consider candidates without them, even if they don’t say as much in job descriptions. Conversely, other employers might advertise inflated degree requirements to attract better-educated applicants, but consider applications from people without degrees anyway. While it’s important to know what employers are asking for in job postings, it is also important to understand whom employers actually hire.

The IPUMS USA database at the University of Minnesota provides individual-level data from the decennial U.S. Census and the annual American Community Survey (ACS). These data may be used to track changes in the educational distribution of workers in the same jobs over time. IPUMS creates a variable to aggregate different jobs into categories that are comparable over time, based on the Census Bureau’s 1990 occupational classification scheme. (More details are available in the methodological appendix at the end of this report.)

The following chart shows the proportion of prime-age (ages 25 to 54) workers with at least a bachelor’s degree in 17 occupational categories over time. While these categories are quite coarse, they provide a decent high-level overview of the sorts of occupations driving degree inflation.

Between 1990 and 2021, all occupational categories except one — teachers and librarians — experienced degree inflation, meaning the proportion of prime-age workers with a bachelor’s degree increased. Six occupational categories experienced significant degree inflation, in that the proportion of prime-age workers with at least a bachelor’s degree increased by 15 percentage points or more:

• Technicians and related support occupations. Includes occupations such as dental hygenists, air traffic controllers, and paralegals. In 1990, 33 percent of this group held a bachelor’s degree or higher, compared to 54 percent today.
• Management-related occupations. Includes occupations such as accountants, insurance underwriters, and human resources specialists. In 1990, 52 percent of this group held a bachelor’s degree or higher, compared to 73 percent today.
• Executive, administrative, and managerial occupations. Includes occupations such as chief executives, legislators, and all types of managers. In 1990, 44 percent of this group held a bachelor’s degree or higher, compared to 62 percent today.
• Health occupations. Includes occupations such as physicians, registered nurses, and therapists. In 1990, 64 percent of this group held a bachelor’s degree or higher, compared to 81 percent today.
• Administrative support occupations. Includes occupations such as office supervisors, secretaries or administrative professionals, and bank tellers. In 1990, 14 percent of this group held a bachelor’s degree or higher, compared to 29 percent today.
• Protective service occupations. Includes occupations such as police officers, detectives, and firefighters. In 1990, 18 percent of this group held a bachelor’s degree or higher, compared to 32 percent today.

Which jobs are driving degree inflation?

It is possible to reach a finer level of analysis by examining individual jobs in the harmonized IPUMS classification scheme. For 284 individual occupations, the following chart compares the share of prime-age workers with at least a bachelor’s degree in 1990 (on the horizontal axis) to the share of prime-age workers with at least a bachelor’s degree today (on the vertical axis). Occupations closer to the upper left-hand corner have experienced more degree inflation over the last three decades.

Determining the drivers of degree inflation, however, requires considering not only the increase in bachelor’s degree share in each occupation, but each occupation’s overall importance to the labor market. For instance, photographic process workers have experienced rapid degree inflation (17 percent had at least a bachelor’s degree in 1990, compared to 63 percent today). But this is a relatively small occupation, with just over 10,000 prime-age workers in 2021, meaning it’s a minor contributor to overall degree inflation.

To measure each occupation’s contribution to overall degree inflation, I create an excess degrees index which considers each occupation’s rise in education levels and its importance to the economy. The index multiplies the percentage-point increase since 1990 in the share of prime-age workers with at least a bachelor’s degree by the number of prime-age workers in the occupation today. The product is the excess degrees associated with that occupation. It is equal to the number of workers who would not have a degree today if bachelor’s degree share in that occupation had remained constant at its 1990 level.

For example, among registered nurses, bachelor’s degree share rose from 46 percent in 1990 to 73 percent today, a 27 percentage point increase. I multiply that increase by 2.75 million prime-age registered nurses to yield 738,754 excess degrees in this occupation. While registered nurses have experienced slower degree inflation than photographic process workers, the enormous size of registered nursing as a profession means it has been one of the most important contributors to degree inflation.

The following chart shows 284 occupations ranked by excess degrees:

Managers and administrators, n.e.c. (not elsewhere classified) is the top occupation by this measure, with over one million excess degrees. Registered nurses and computer software developers follow. The top-ten list of jobs by excess degrees is not dominated by a single occupational category, but seems to contain a diverse array of occupations.

Occupations where the bachelor’s degree share was already high in 1990 are over-represented. This group includes accountants and auditors, computer software developers, and managers and specialists in marketing, advertising, and public relations. In all of these occupations, a majority of prime-age workers had a bachelor’s degree or higher in 1990. (For comparison, just 25 percent of all prime-age workers in 1990 had four-year degrees.)

But some occupations contributing to degree inflation, especially secretaries, did not commonly require college degrees thirty years ago. The share of prime-age secretaries with at least a bachelor’s degree has nearly quadrupled between 1990 and today, from 9 percent to 33 percent. This has yielded over 370,000 excess degrees.

While this data sheds light on which occupations have driven degree inflation, it cannot tell us why degree inflation has occurred, nor whether it is justified by changes in job responsibilities. This report will not attempt to answer these questions comprehensively. But the next section examines selected occupations near the top of the excess-degree ranking to better understand why degree requirements in these professions have increased so rapidly.

A closer look at the jobs driving degree inflation

The reality of degree inflation is indisputable. There is copious evidence that employers have added bachelor’s degree requirements to job postings over time, that it is more difficult for non-college-educated workers to transition to better-paid jobs, and that the share of workers with a bachelor’s degree or higher has steadily crept upwards in most occupations.

The million-dollar question is “why?” Despite its negative consequences on students, workers, and the economy, degree inflation may be justified if jobs themselves are changing in ways that make bachelor’s degrees necessary to do the work. While this report will not attempt to answer this question for all occupations, the following section will zero in on a handful of professions experiencing severe degree inflation to gain a fuller understanding of the forces at work.

Several questions motivate the qualitative analysis to follow: Have the skills and capacities required to perform jobs experiencing degree inflation changed in meaningful ways? Is a bachelor’s degree the best way to equip future workers with those skills and capacities? And are there alternative ways to measure workers’ qualifications for the job, which present a lower cost to workers than obtaining a college degree, that employers could rely on instead?

The analysis will look at three occupations or occupation groups: secretaries and administrative professionals, managers and administrators, and registered nurses.

Secretaries and administrative professionals

The role of a secretary or administrative professional is a classic “learn by experience” job that has traditionally been a key career path for individuals with no education beyond high school. According to the Bureau of Labor Statistics, “high school graduates who are comfortable using word processing and spreadsheet programs usually qualify for entry-level positions” as secretaries. “Workers typically learn their duties over several weeks on the job.” It has usually been possible to advance to higher-level work as an executive secretary through experience rather than additional education.

That is changing. While only nine percent of secretaries had four-year college degrees in 1990, by 2021 than proportion had nearly quadrupled to 33 percent. Job postings for secretaries that request a degree far outpace the proportion of workers in this profession who currently have degrees, according to Dismissed by Degrees. That report estimated that rising degree requirements could close more than 750,000 secretarial positions to workers without degrees — making this one of the top jobs at risk of degree inflation.

The nature of the job has admittedly changed. In the past, a single secretary or administrative professional may have supported just one person in their organization. But according to the American Society of Administrative Professionals (ASAP), “changes in the workplace and advancement in technology mean that this set-up is much less common.” An ASAP survey showed that 85 percent of administrative professionals support more than one person, and 30 percent support ten or more, though the sample does appear to be skewed towards higher-earning administrative professionals, who may support more people.

The ASAP survey also showed that administrative professionals report they required 20 different skills to do their jobs, on average. These skills include email and calendar management, spreadsheet tools, and meeting and event coordination. These are not simple skills, but most are ones that can be learned on the job.

Moreover, the field has professional certifications for workers to demonstrate their skills, most notably the Professional Administrative Certification of Excellence (PACE). PACE, which is geared towards people who are already administrative professionals, consists of an online course that covers interpersonal communication, task and project management, computer and internet technology, and management skills. Workers complete the course at their own pace then take an exam to receive their certification. The total cost is $475. The credential is associated with a $10,000 increase in salary, though it is impossible to know whether this is because of the certification or the sorts of workers who obtain it.

If the job has become more complex over time, and if secretaries have become more productive, then salaries should rise as well. An increase in salaries would partially justify an increase in degree requirements. In 1990, prime-age secretaries earned a median salary of $31,100 (in 2022 dollars). Since then, the media salary has risen to $38,200, a 23 percent increase.

While that is encouraging, real median salaries for all prime-age workers rose at a similar clip — 24 percent — over the past 30 years. For secretaries, therefore, salaries rose at the average rate while degree requirements rose much faster than the average. While employers are asking prospective secretaries for college degrees, they are not paying college-level salaries to match.

Overall, there is little evidence to suggest that rising degree requirements for secretaries and administrative professionals are justified. Though workers in this profession have taken on more responsibilities, and skill requirements have become more complex, it is doubtful that a college degree is the best way to equip workers with those skills , especially given the existence of alternative certifications. Moreover, salaries have not risen enough to justify the imposition of degree requirements. Given this profession’s size, it is a key area where employers ought to reconsider asking for a college degree.

Managers and administrators

Managerial and administrative positions have experienced some of the most significant degree inflation. Among positions which IPUMS codes as “executive, administrative, and managerial,” 44 percent of prime-age workers held a bachelor’s degree or higher in 1990, compared with 62 percent today — an 18 percentage point increase. There have been even larger rises in education levels in some subcategories, such as human resources and labor relations managers. Management is transforming from a field where a college degree was common, but not required, into a field where a degree is a prerequisite.

Some workers may find themselves able to start on the career ladder without a college degree. But when they try to advance their careers, they hit a “paper ceiling” before reaching management level. Many workers rightly complain that they have accumulated decades of experience in their fields, only to be denied a promotion to a more senior level simply because they lack a college degree.

Human resources professional Suzanne Lucas puts it bluntly: “There’s nothing illegal about discriminating against someone who lacks a college degree, but there is a whole lot of stupid involved. If you’ve got years of experience that prove your capabilities, then what does it matter what you did between the ages of 18 and 22?”

To test the theory that promotion is more difficult for workers without degrees, I use the Current Population Survey to calculate the likelihood that a worker is promoted to a management role, depending on whether he or she has a degree. Controlling for age, gender, and previous occupation, I find that non-management workers with college degrees are significantly more likely to be promoted to a management role than similar workers without degrees. During the Great Recession, workers with degrees were more than twice as likely to enjoy a promotion. While the gap has since narrowed, it is still substantial.

Degree inflation at the management level could become a self-fulfilling prophecy: if individuals believe they need a college degree to progress beyond a certain point in their careers, more will pursue one, meaning feeder occupations for management roles will become more degree-heavy. In turn, this could drive more degree inflation at the management level, creating a feedback loop.

Another factor at play is the increase in education levels among human resources professionals, which could create a bias in hiring for other roles. “The upcredentialing of Human Resource positions could itself be contributing to the credential gap in other occupations if higher-credentialed recruiters are displaying an affinity for similarly qualified talent,” one Burning Glass report argues. The share of non-managerial HR professionals with degrees rose from 45 percent to 66 percent between 1990 and today.

To be sure, many analysts believe management has become more complex over time, thanks to the rise of information technology. And salaries for workers in management roles have risen substantially. Median earnings for prime-age managers rose 37 percent since 1990, compared to 24 percent for all prime-age workers. But it’s unclear whether the rising complexity of management justifies the imposition of college degree requirements — especially since candidates for management roles usually already have years or decades of experience which hiring decisionmakers can use to evaluate their fitness for promotion.

Research by Matt Sigelman, Joseph Fuller, Nik Dawson, and Gad Levanon shows that advancement opportunities for workers without degrees differ greatly across companies, even between similar businesses that hire for similar sorts of roles. To take one example, the authors find that “a sales associate at Best Buy is three times more likely to make it to a retail manager role than a peer is at Kohl’s.” This suggests that at least some of degree inflation in managerial roles is down to corporate practice rather than an underlying need for a college education.

Fortunately, that means committed companies can turn degree inflation around. The research highlights several Fortune 250 companies which have made a concerted effort to hire and promote workers without degrees, notably AT&T, IBM, and Liberty Mutual. Accenture, an IT firm, offers a 2,000-strong apprenticeship program which now fills more than 20 percent of the company’s entry-level roles. Graduates of the apprenticeship program, which requires only a high school diploma, have frequently gone on to management positions.

Registered nurses

The share of registered nurses with at least a bachelor’s degree rose from 46 percent in 1990 to 73 percent today. Given the size of the profession, this occupation is responsible for more degree inflation than almost any other. It is also an occupation where the case for degree requirements is somewhat stronger, though by no means ironclad.

The licensing requirements for registered nurses are set at the state level. The minimum qualification is a two-year degree — the Associate Degree in Nursing, or ADN — which allows aspiring nurses to take a qualifying exam called the NCLEX-RN. However, many registered nurses obtain a four-year degree — the Bachelor of Science in Nursing, or BSN. Some nurses earn a BSN before they start their careers, while others earn it later on top of their ADN.

The push to “professionalize” nursing by making a bachelor’s degree the standard educational qualification dates back to 1965, when the American Nurses’ Association advocated that “the minimum preparation for beginning professional practice should be baccalaureate degree education in nursing.”

A major turning point came in 2011, when the Institute of Medicine (IOM) issued a report calling to “increase the percentage of nurses who attain a bachelor’s degree to 80 percent by 2020, and double the number who pursue doctorates.” The report argues that “competencies needed to practice [as a nurse] have expanded, especially in the domains of community and public health, geriatrics, leadership, health policy, system improvement and change, research and evidence-based practice, and teamwork and collaboration,” and that steeper education requirements are the solution. Bachelor’s degree programs involve more exposure to humanities and the liberal arts, advocates contend, which gives BSN-educated nurses a fuller understanding of their patients.

Unlike most other professions, there is an extensive academic literature looking at the relationship between degree inflation and job performance among registered nurses. For instance, Blegen et al. (2013) find that hospitals with a higher proportion of nurses with four-year degrees tended to have better patient outcomes. Aiken et al. (2017) link nurse professionalization to lower patient mortality and higher ratings of care.

These studies, however, are almost all associational. Unobserved factors correlated with nurses’ education levels may drive patient outcomes instead, such as hospitals’ resources or the types of patients they serve. Moreover, the bachelor’s degree itself may not lead to improved job performance; aspiring nurses who choose to pursue the BSN may simply be more diligent. It does not necessarily follow that encouraging more nurses to earn bachelor’s degrees will improve patient outcomes.

Nevertheless, these studies may be one reason that healthcare employers pay a premium to hire highly educated nurses. Registered nurses’ pay has kept up with increased education requirements: median salaries for prime-age registered nurses rose from $50,500 in 1990 to $72,200 today, a 43 percent increase. That outpaces the 24 percent rise in salaries for prime-age workers overall.

While IOM’s 80 percent goal has not been met, education levels for nurses are undoubtedly rising. Between 2010–11 and 2020–21 academic years, the number of four-year nursing degrees conferred nearly doubled while the number of two-year nursing degrees conferred remained stagnant. The American Association of Colleges of Nursing wants to go further, arguing that more nurses should pursue master’s and doctoral degrees — conferrals of which are also rising.

Many employers have heeded IOM’s advice and required bachelor’s degrees for nurses. One state, however, has gone further and enshrined the mandate into law. In 2017, New York passed a law requiring all registered nurses to obtain a bachelor’s degree within ten years of their initial licensure.

So far, New York is the only state to take such an action. North Dakota formerly had a bachelor’s degree requirement for registered nurses on the books, but the state repealed it in 2003 after facing a nursing shortage.

There may be good reasons for healthcare employers to require or prefer bachelor’s degrees for registered nurses. But those reasons must be balanced against the costs of such credentialism: degree requirements will make hiring more difficult at a time when analysts project a nursing shortage to develop over the coming decade. At the very least, employers should be willing to hire nurses without a four-year degree then help them obtain additional training on the job.

Above all, there is no reason for state governments to mandate a bachelor’s degree for nurses, as New York has done. If nurses with four-year degrees are better at their jobs, employers will make the decision to hire them; there is no need for government intervention. Legal mandates may cause shortages, as occurred in North Dakota. Moreover, employers may develop alternative means of certifying nurses’ skills and capacities beyond the BSN. States shouldn’t take those decisions out of their hands.

Employers must lead the fight against degree inflation

Evidence shows that degree inflation is widespread. While there is some evidence that degree requirements have benefits in certain occupations, such as registered nursing, any benefits of degree inflation must be balanced against its costs. In most other occupations, there is little justification for degree inflation. Among secretaries and administrative professionals, education levels have skyrocketed but salaries have risen only modestly; here degree inflation threatens to close what was once a promising career path for those with only a high school diploma.

The primary responsibility for fighting degree inflation rests with employers. Employers should strip bachelor’s degree requirements from job postings wherever possible. Most large firms use automated recruiting systems to manage job applicants; they should ensure these do not filter out qualified workers without degrees. In addition, firms should try to identify biases that may prejudice hiring decisionmakers against workers without college degrees.

Employers should also strive to identify alternative credentials that can be used to assess job applicants’ skills and capacities. There is untapped potential here: thousands of industry certifications exist, but only a handful are frequently mentioned in job postings. In addition to leveraging alternative credentials, employers should invest in on-the-job training to help employees with different educational backgrounds acquire the skills they need to do their jobs well.

Signs of hope?

There has been progress in recent years. A recent Burning Glass Institute report provided evidence for a “degree reset.” Bachelor’s degree requirements are disappearing from millions of job postings, especially “middle-skills” jobs where only some workers have a bachelor’s degree. For example, in 2017, 43 percent of job postings for real estate agents and brokers requested a bachelor’s degree, but that share fell to 26 percent by 2020.

Some companies are making more progress than others. In 2021, 84 percent of the job postings for software developers and engineers at Hewlett-Packard requested a bachelor’s degree. But at competitor IBM, only 31 percent of job postings for the same occupation requested a degree. That suggests much of degree inflation can be reversed by individual employer initiative, at least for certain occupations.

There is also rising interest in alternative pathways besides the bachelor’s degree. The Department of Labor reports a 64 percent increase in new registered apprenticeships between 2012 and 2021. The number of coding bootcamp graduates grew from 34,000 in 2019 to 59,000 in 2022, per CareerKarma surveys. Schools have seen rising enrollment in trade programs even as overall college enrollment sinks. These trends signal that there is at least some employer interest in alternatives to the bachelor’s degree.

These developments, however, have not yet had a significant impact on degree inflation as measured by the actual education levels of workers. Education levels rose in every single major occupational category between 2019 and 2021. Economist Gad Levanon has presented evidence that the share of workers with degrees — conditional on occupation — increased even faster after 2017, the year Dismissed by Degrees was released. More work remains to be done and governments can play a role.

Policy recommendations to address degree inflation

Federal, state, and local governments can all help reduce degree inflation. While some governments may be tempted ban bachelor’s degree requirements outright, this would constitute government overreach. Such a move might be impossible to enforce anyway, since employers could quietly reject job applicants without degrees. But there are many other policy options to bring down degree inflation.

Tackling degree inflation in state and local governments

Degree inflation is at its most acute in state and local governments, meaning it is much harder for workers to land a middle-income job in a state or local government without a college degree. In state governments, 63 percent of workers earning between $40,000 and $60,000 per year have a bachelor’s degree or higher, compared to just 28 percent in the private sector.

Fortunately, several states have announced efforts to replace degree-based hiring with “skills-based” hiring, thus emphasizing job applicants’ skills and competencies in the hiring process rather than their levels of education. As of May 2023, the governors of ten states — Alaska, Colorado, Maryland, New Jersey, North Carolina, Ohio, Pennsylvania, South Dakota, Utah, and Virginia — have announced that they will remove bachelor’s degree requirements from most job postings in the state executive branch and substitute skill or experience requirements instead.

It is too early to assess whether these efforts have paid off. One early leader, Maryland, has seen a 34 percent increase in job applications from individuals with relevant skills or experience but no college degrees, an encouraging development. Some are more skeptical: an anonymous HR manager in the Utah state government has said that her state’s change in policy may not make much difference to actual hiring practices.

Still, the signal value of eliminating degree requirements is important — Maryland’s boost in job applications from workers without a degree proves it — and hiring practices may change over time with concerted effort by state leaders. Colorado, for example, complements its skills-based hiring practices with a public-sector apprenticeship program to prepare workers for state government roles. Policymakers should expand these efforts, not just to improve the fairness of state government hiring, but also to send a message to private employers that a college degree shouldn’t be necessary to succeed.

Repeal laws and regulations that stipulate unnecessary degree requirements

Many states go beyond requiring bachelor’s degrees for their own workers. Some compel the private sector to require bachelor’s degrees for workers in certain occupations. New York’s “BSN in 10” law requires registered nurses to obtain a bachelor’s degree within ten years of initial licensure, and advocacy groups have pressured more states to follow suit. The District of Columbia recently instituted a mandate that directors of child care centers have bachelor’s degrees, while requiring most other child care workers to have associate degrees.

Noah Trudeau and Edward Timmons analyzed hundreds of commonly licensed occupations in a report for the Archbridge Institute. Many states institute minimum degree requirements for certain professions, while others license those professions through alternative means or do not license them at all. For instance, home interior designers must have a bachelor’s degree in eight states. But in nineteen other states, home interior designers only need an associate degree. In twenty-three states, home interior designers do not need a license at all.

Since many states have lower or nonexistent degree requirements for professions such as home interior design, bachelor’s degree requirements for these professions in other states are probably unnecessary. If home interior designers in North Carolina don’t need a bachelor’s degree, why should they need one in Virginia? States should reduce legal minimum degree requirements for licensed professions wherever possible.

The ball is mostly in state governments’ court, but the federal government can help. Representative Diana Harshbarger (R., Tenn.) introduced a bill that would require federal agencies to “regularly review policies that may cause states to adopt unnecessary occupational licensing requirements” and also requires states to submit a plan to reduce unnecessary licensure as a condition of receiving funds under the Workforce Innovation and Opportunity Act.

Treat college-degree requirements and other employment practices equally

The 1971 Supreme Court decision in Griggs v. Duke Power barred employers from using skills or aptitude tests to make hiring decisions, if those tests had a disproportionate impact on protected groups, unless they were “demonstrably a reasonable measure of job performance.” Federal regulators are empowered to enforce these rules and determine what sorts of tests count as “reasonable.” For instance, in 2017 the Equal Employment Opportunity Commission sued a railroad company for testing job seekers’ physical strength, a practice which the commission alleged “causes a discriminatory impact on female workers.”

Many analysts attribute degree inflation to the Griggs decision. Employers, fearing lawsuits and regulatory attacks, gave up the use of skills tests and fell back on college degrees as a measure of job applicants’ aptitude. “In the end, Griggs hurt the very people it was supposed to help,” writes Neetu Arnold. “Minorities and low-income students must now pass through another expensive and lengthy barrier in order to secure stable, well-paying jobs.”

This is ironic, as using college degree requirements in hiring decisions almost certainly causes a disparate impact on minority groups. Forty-two percent of white adults 25 and older have at least a bachelor’s degree, compared to just 28 percent of Black adults and 21 percent of Hispanic adults. Yet college degrees are rarely the subject of lawsuits alleging disparate impact in hiring, despite mountains of evidence suggesting they are not a prerequisite for satisfactory job performance.

In an essay for National Affairs, Frederick Hess and Grant Addison argue that college degree requirements should be treated no differently than other employment practices when it comes to nondiscrimination law. Hess and Addison figure that lawmakers could either “broaden the ability of employers to use professionally devised employment tests in the same manner they use degrees,” or “subject college degrees to the same stringent tests that are applied to other kinds of employment tests.” While it’s up to Congress to determine how to balance disparate-impact concerns with employers’ need to assess job applicants’ qualifications, policymakers should ensure that the same standard is applied across the board. Legally, degree requirements should be treated no differently than any other hiring practice.

Expand non-college pathways into the labor force

When it comes to funding priorities, the federal government has its thumb on the scales in favor of traditional colleges and universities. A student who wants to get a bachelor’s degree has access to Pell Grants, subsidized federal loans, work-study, and tuition tax credits, while colleges enjoy additional direct support from governments. Efforts to expand access have succeeded: the share of the population 25 and older with a bachelor’s degree doubled between 1983 and today.

Alternatives to college get shortchanged. America’s main workforce training programs receive less than one-fiftieth the funding of the Pell Grant program alone. As a share of GDP, America spends far less on workforce development than peer countries. Much workforce training funding ends up being spent at traditional colleges and universities anyway, where it can be combined with other funding streams.

Government support for the traditional college pathway means employers rely on the four-year degree as a signal of quality — even if alternative educational pathways could prepare students for jobs more effectively and at a lower time and money cost. Moreover, the skewed playing field becomes a self-fulfilling prophecy: if students pursue bachelor’s degrees, then employers will ratchet up degree requirements, leading more students to pursue bachelor’s degrees.

Policymakers can break the cycle by supporting alternatives to traditional college. This does not require a big new government program; rather, policymakers should ensure that existing funding streams do not stack the deck against alternatives. For instance, Representative Elise Stefanik (R., N.Y.) has introduced a bill to expand Pell Grant funding to short-term workforce preparation programs. Congress could also overhaul the federal work-study program, which subsidizes wages of employed college students, to better support apprenticeships and work-based learning. Leveling the playing field may also involve reining in subsidies for traditional colleges.

Reform federal subsidies for traditional higher education

Degree inflation may not stop with the bachelor’s degree. Now that a four-year degree is becoming more common, more and more workers are pursuing master’s degrees to differentiate themselves from the herd. The vicious cycle may continue if employers start to demand advanced credentials. The authors of a comprehensive degree inflation analysis warn: “As more workers gain access to bachelor’s degrees, employers may begin to look to postgraduate degrees as the new marker of skill — creating a new opportunity gap between those with and without postgraduate degrees.”

This is already happening, to an extent. In 2000, 19 percent of workers earning between $80,000 and $100,000 (in today’s dollars) had a graduate degree. By 2021, the proportion had risen to 26 percent — an increase of more than a third — and it appears to be accelerating.

Government support for graduate education is in some ways even more extensive than support for bachelor’s degrees. While federal undergraduate borrowing is capped at $31,000 for dependent students, graduate students may borrow effectively unlimited amounts from the federal government. As a result, CBO forecasts that graduate loans will account for 49 percent of new borrowing over the coming decade.

Much of that will go to programs that do not increase students’ earnings enough to justify the costs of tuition. FREOPP estimates that 40 percent of master’s degree programs are not worth it from a financial perspective. But a bigger supply of workers with graduate education — new master’s degree conferrals have nearly doubled since 2000 — may still cause graduate degrees to become an effective requirement for jobs that do not pay graduate-level salaries.

The solution is to rein in federal subsidies for graduate school. Ideally, Congress would abolish the federal graduate loan program entirely, but a commonsense cap on borrowing is also welcome. In addition, the federal government should defund graduate degree programs where graduates’ earnings are insufficient to repay debts. This will force employers to pay higher salaries if they want to hire someone with a master’s degree. While there’s a role for government in helping workers acquire skills, there is no role for government in subsidizing employers’ frivolous preferences for hiring workers with unnecessary credentials.

Conclusion

Degree inflation is one of the defining challenges of today’s economy. Rising education requirements for middle-class jobs threaten to close employment opportunities to the 62 percent of Americans without a four-year degree. Moreover, degree inflation will exacerbate labor shortages and lead to underemployment among college graduates. While employers have made progress in recent years removing degree requirements from job postings, more work remains to be done.

While private employers must take the lead in fighting degree inflation, there is also a role for public policy. State governments should eliminate statutory degree requirements wherever possible, both for government jobs and for licensed occupations. The federal government should ensure that alternatives to traditional higher education operate on a level playing field with incumbent colleges and universities, and rein in the higher education subsidies that fuel degree inflation.

A college degree should not be a prerequisite for a middle-class standard of living. Fortunately, policymakers and employers are waking up to the peril of degree inflation for working-class Americans. Governments and the private sector should both make fighting degree inflation a priority.

Methodological Appendix

This appendix briefly describes the methodology used to assess the changing proportion of workers with a college degree in various occupations between 1990 and 2021.

The analysis includes only prime-age workers: those aged 25 to 54. The analysis drops individuals in the armed forces and those not in the labor force; recently unemployed individuals are included based on their most recent job.

In the 1990 decennial Census, workers are classified as having a bachelor’s degree if they had completed four or more years of college. For subsequent years, the Census and American Community Survey ask respondents whether or not they hold a bachelor’s degree.

Earnings figures include personal wage and salary income only, with business income excluded. All earnings figures are adjusted to 2022 dollars using the Personal Consumption Expenditures (PCE) index.

I classify workers to jobs using IPUMS’ OCC1990 variable, which aims to harmonize occupational classifications over time. The variable uses the 1990 occupational classification scheme as a baseline and reclassifies jobs in later years to one of the 1990 occupational categories. For instance, the occupation “web developers” in later surveys is coded as “computer systems analysts and scientists” in the harmonized variable. More details are available in this technical paper.

The harmonization is not perfect. Some occupations in the OCC1990 variable experience large changes in size between 1990 and 2021. This may signal that one of the harmonized occupational categories does not really capture people doing the same sorts of work. To avoid drawing erroneous conclusions from such inconsistent occupational categories, I drop 27 OCC1990 codes where the occupation’s share of the labor force changes by a factor of five or more between 1990 and 2021. That is, occupations where the labor force share increases by at least 400 percent or falls by at least 80 percent.

The 17 “coarse” occupational categories used in this report are a modified version of the classification structure of the OCC1990 variable. The 17 coarse occupational categories include the following OCC1990 codes:

• Executive, administrative, and managerial occupations: Codes 3–22
• Management related occupations: Codes 23–37
• Engineers, computer scientists, and natural scientists: Codes 43–83
• Health occupations: Codes 84–106
• Teachers and librarians: Codes 113–165
• Other professional specialty occupations: Codes 166–200
• Technicians and related support occupations: Codes 203–235
• Sales occupations: Codes 243–283
• Administrative support occupations: Codes 303–389
• Protective service occupations: Codes 415–427
• Food and personal service occupations: Codes 405–407 and 434–469
• Farming, forestry and fishing occupations: Codes 473–498
• Mechanics and repairers: Codes 503–549
• Construction trades and extractive occupations: Codes 558–617
• Precision production occupations: Codes 628–699
• Machine operators, assemblers, and inspectors: Codes 703–799
• Transportation and material moving occupations: Codes 803–889