Disastrous Degree Inflation: An Interview with Preston Cooper

The following is an interview conducted by Archbridge Director of Programs Ben Wilterdink with Preston Cooper, a research fellow at the Foundation for Research on Equal Opportunity (FREOPP). We discuss his research on higher education policy and his new report, How Unnecessary College Degree Requirements Hurt The Working Class.

Ben Wilterdink: For those who might not be aware, what is degree inflation? And why do you consider it to be such a problem?

Preston Cooper: Degree inflation is something that many of us have experienced—when you apply for a job that used to require only a high school education, suddenly the employer now wants a bachelor’s degree. This occurs even though the skills required to do that job may not have changed in ways that justify the additional degree requirement. It’s a problem because even though degree requirements for jobs are rising, salaries aren’t necessarily going up at a commensurate rate. Many workers are running faster just to stay in place: they have to complete more and more education, but they may not be realizing the higher earnings necessary to justify the additional time and expense.

Ben: What are some of the specific ways in which degree inflation harms the working class?

Preston: Most obviously, degree inflation closes off job opportunities to the 62% of American adults who lack a four-year college degree. For instance, the job of a secretary used to be a good career path for people with only a high school education, but now many employers want a bachelor’s degree for this job. But degree inflation also hurts college graduates, because many end up in jobs where a college degree is not necessary to do the work. One study found that such “underemployed” college graduates earn over $10,000 per year less than their peers. College graduates in jobs paying non-college salaries will find it harder to repay their student loans, among other things.

Ben: Which jobs are being the most affected by degree inflation?

Preston: No one type of job is driving degree inflation. That’s what makes it such a problem: it’s an economy-wide issue. But if we want to name names, according to my analysis, the occupations most responsible for degree inflation are: managers and administrators, registered nurses, computer software developers, salespersons, secretaries, accountants, financial specialists, and police officers.

Ben: Why have we seen such an increase in degree inflation in recent years?

Preston: We’ve seen a massive increase in the number of college graduates in the last three decades. That means the supply of college graduates has outpaced demand for college-educated workers, with the result that employers add college degree requirements to jobs that didn’t previously have them. In addition, the Great Recession caused a big increase in the ratio of jobseekers to job openings, so employers became more selective about whom they hired. That led to more degree requirements as well. While employers have started to roll back some of the degree requirements they added after the recession, studies show that the share of job postings specifying a degree requirement is still far above its pre-Great Recession level.

Ben: How would you respond to the argument that more jobs require higher levels of education than in the past because they’ve simply gotten more complicated over time?

Preston: It’s true that some jobs have become more complicated over time, but it’s not enough to show this. You also have to demonstrate that a four-year degree is the best way to prepare workers for those more complicated jobs. There’s little evidence that higher levels of education make people more effective workers; in fact, some evidence shows that college-educated workers are less engaged and have higher turnover than workers without degrees in similar roles. I’d like to see employers try and identify alternative means to certify workers’ skills. For instance, there are professional certifications for secretaries (one of the jobs most vulnerable to degree inflation) that workers can acquire at a fraction of the time and money involved with pursuing a bachelor’s degree.

Ben: What are some of the ways public policy can be used to fight degree inflation?

Preston: First, governments should ensure they themselves do not unduly require bachelor’s degrees for jobs. I’m encouraged to see many state governments removing degree requirements from most positions in the state executive branch. In addition, state governments should get rid of degree requirements in occupational licensure wherever possible. For instance, eight states require bachelor’s degrees for home interior designers, even though about half of states don’t license this profession at all. States and the federal government should also ensure that funding streams do not privilege the traditional four-year degree over alternative pathways like apprenticeships, trade schools, short-term workforce preparation programs, and on-the-job learning. Our current problem with degree inflation is due in no small part to heavy subsidies for traditional college, but scant support for alternatives that might prepare people for the workforce faster and at a lower cost.

Ben: Ultimately, you write, “employers must take the lead in fighting degree inflation.” How should they go about doing this, and are there any examples of employers doing this now?

Preston: Individual employer effort can go a long way towards fighting degree inflation. Employers should remove degree requirements from job postings wherever possible and ensure that automated recruiting systems do not filter out qualified workers without degrees. They should also strive to identify alternative means of certifying workers’ skills and invest in on-the-job training for entry-level workers of all education levels. You can see the results of this individual employer effort by looking at companies in the same industry: while Hewlett-Packard requires bachelor’s degrees for 84% of its software developer roles, its competitor IBM requires degrees for only 31% of these roles. There’s no reason more companies can’t imitate what IBM is doing.

Ben: Overall, are you more optimistic or pessimistic about making progress on the problem of degree inflation over the next 10 years? Why?

Preston: I’m optimistic that policymakers and employers now seem to recognize this is a problem, even if they haven’t settled on how to fix it. My worry is that employers start removing degree requirements from job postings but declare victory and stop there. Hiring decision-makers may still favor workers with degrees, even if they no longer do so explicitly. It’s going to take a more concerted effort, including changes in public policy and cultural shifts, to conquer degree inflation for good.

Preston Cooper
Preston Cooperhttps://medium.com/@preston.cooper.1984
Preston Cooper is a senior fellow at the Foundation for Research on Equal Opportunity, where he focuses on higher education policy.
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