For decades, the four-year degree was considered the best pathway to the middle class. Today, workers and employers increasingly recognize that not possessing a college degree can be a barrier to opportunity for many workers.

Do you want to learn more about fighting degree inflation? Then play this party game/icebreaker “Two Truths and a Lie.”  

A. There are more open positions than unemployed people.  
B. There is a severe shortage of middle-wage workers due to the degree gap.
C. Since 2017, degree requirements have not declined overall.  

A. Truth. Currently, 5.9 million people are unemployed despite there being 10.8 million open positions. One major reason for this is the widespread proliferation of degree requirements for jobs over the past decade, referred to as “degree inflation” or the “paper ceiling.” This phenomenon refers to when employers seek a bachelor’s degree as the minimum education for positions that previously required less education. The actual skills and expectations of the job have not materially changed. Millions of non-college-educated people could be gainfully employed in upwardly mobile careers, but degree requirements stand in their way. Others could be trained to obtain desired skills without ever needing to step onto a college campus. 

B. Truth. Over the past two decades, the percentage of non-degreed workers in so-called “gateway” jobs or middle-wage jobs that lead to higher-paying careers, shrank from 54% to 46%, representing a loss of 7.4 million jobs. Workers needed different skills and more education for new jobs. When job openings were scarce, degreed job applicants were willing to apply for positions for which they were overqualified. Employers took it as an opportunity to raise the education level for new positions to attract more educated workers regardless of whether the diploma met a specific job function. This led to a severe shortage of middle-wage workers due to the degree gap. Only about a third of the adult population possesses a college degree, but millions of jobs require a college diploma. 

C. Lie! In one large-scale analysis of over 50 million job postings, researchers discovered that between 2017 and 2019, degree requirements declined overall in 63% of occupations, but more specifically in 46% of the middle-skill and 31% of high-skill occupations. Researchers consider this a structural reset reflecting that over time employers had rethought job requirements and decided that a degree was unnecessary. Structural resets are considered permanent.

In response to the COVID-19 pandemic employers suspended degree requirements in 27% of occupations. Positions requiring a degree dropped from more than a third (35%) in 2019 to less than a quarter (23%) in 2020. This reset is a cyclical reset. Unlike the structural reset, the pandemic’s cyclical degree reset could be reversed. 

Whether cyclical or structural, the momentum is now behind degree deflation. If trends continue, a projected additional 1.4 million jobs could become available to non-degree workers over the next five years.

Bottom Line: 

Abandoning degree requirements will require more work on the part of recruiters and employers, but the benefits of hiring better candidates are critical. Residual effects of the pandemic, automation and artificial intelligence, offshoring of jobs, and retiring Baby Boomers will only worsen the mismatch of available jobs and workers. However, combating degree inflation—a bipartisan issue—can reverse shrinking labor force participation, boost productivity in the public and private sectors, and expand middle-class opportunities to people who are excluded from pathways to upward mobility. 

To learn more, read our Policy Focus on fighting degree inflation.