The last 20 years have seen explosive growth in universities. At the same time, vocational education and training (VET) faced a tsunami of financial challenges. As a result, VET is now stigmatised as a second-class education option, and employers demand university credentials for jobs that formerly did not require them. This credential inflation severely disadvantages those with the ability and experience to perform a job but, for one reason or another, were unable to study at a university. Instead of increasing social mobility, the vast growth in degrees has had precisely the opposite... [+] Show more
The last 20 years have seen explosive growth in universities. At the same time, vocational education and training (VET) faced a tsunami of financial challenges. As a result, VET is now stigmatised as a second-class education option, and employers demand university credentials for jobs that formerly did not require them. This credential inflation severely disadvantages those with the ability and experience to perform a job but, for one reason or another, were unable to study at a university. Instead of increasing social mobility, the vast growth in degrees has had precisely the opposite effect. As the number of graduates increased, the economic value of their degrees withered. Twenty per cent, or more, of today's university students, would have been better off financially by skipping university and going straight from school to work. The same is true for the thousands of students that drop out of university each year.
The traditional view is that higher education increases graduates' earnings because the knowledge and skills they acquire at university make them more productive than non-graduates. But times are changing, and the economic value of a degree is decreasing. Universities, however, remain unaffected and continue to churn out more and more degrees - each worth less than the previous one. This paper seeks to uncover the causes of 'degree inflation' and what can be done about it. It is divided into five sections. The first describes the staggering growth of higher education. The second analyses the effects of this growth on both graduates and those who were unable to attend university. The third examines the impact of higher education on national productivity and wealth. The fourth identifies the forces and policies driving the never-ending growth in degrees. The last section attempts to assist this process by offering policy proposals designed to make higher education more affordable, useful, and fairer for all.
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