Key Points

• State governments contribute to degree inflation—the addition of college degree requirements to jobs that did not previously have them—through their own hiring practices, and through occupational licensing laws.
• While 39 percent of private-sector workers hold a bachelor’s degree or higher, the same is true for 63 percent of state and local government workers. Even within the same occupations, state and local governments are likelier to require a college degree.
• Several states’ occupational licensing rules require bachelor’s or master’s degrees for jobs where a lower level of education is needed in other states. States require bachelor’s or master’s degrees for many jobs that do not pay enough to justify these credentials.

Executive Summary

State governments have significantly exacerbated the phenomenon of degree inflation, where jobs increasingly require college degrees that were not previously necessary. State hiring practices and stringent occupational licensing laws perpetuate this trend. These policies restrict access to various professions, create labor shortages, and reduce the return to a college education for many students.

A stark contrast exists between the educational requirements of the private sector and those of state and local governments. While only 39 percent of private-sector workers possess a bachelor’s degree or higher, 63 percent of state and local government employees have a degree. Even within the same occupations, state and local governments are more inclined to mandate college degrees than their private-sector counterparts. Fortunately, around half of the states have declared their intention to change this, though it is too early to tell whether their efforts will pay off.

Furthermore, several states impose occupational licensing rules that necessitate bachelor’s or master’s degrees for positions that require significantly lower educational qualifications in other states. Home interior designers, for instance, need a bachelor’s degree to do their job in eight states, but no degree at all in 24 other states. Through licensing laws, states also impose degree requirements on occupations that typically do not pay enough to justify the time and expense of a degree, such as clinical social work.

Fortunately, state governments have a unique capability to fight degree inflation by changing their hiring practices and dismantling unnecessary degree requirements in occupational licensing rules. Innovation-minded states such as Colorado and Utah have taken important steps toward turning rhetoric against degree inflation into reality.

Introduction

Degree inflation—the phenomenon whereby employers demand higher degrees for jobs that did not previously require those levels of education—has garnered more attention in recent years, as governments and private employers alike tackle the scourge of unnecessary bachelor’s degree requirements.

In 2023, FREOPP published How Unnecessary College Degree Requirements Hurt The Working Class, a report that examined the degree inflation phenomenon in detail. The report found that the share of workers with a bachelor’s degree or higher has risen in most occupations over the past several decades. For instance, 73 percent of registered nurses today have a bachelor’s degree, whereas the figure was just 46 percent in 1990.

Read the entire report here.