Degree Inflation (Academic Inflation)


The term degree inflation refers to the practice of requiring job candidates to possess a college diploma when the job type did not traditionally require a four year degree.  An increase in degree inflation can occur when there is an oversupply of candidates with college degrees.


Also referred to as academic inflation, degree inflation occurs when there are a relatively large number of candidates holding associate and bachelor's degrees competing for relatively few job openings.  When this occurs, businesses may change the minimum job specifications for positions that usually do not require candidates to hold a college degree.

An increase in competition for job openings, along with degree inflation, can result in a higher proportion of the total workforce holding college degrees.  In order to distinguish themselves, these same workers may seek to strengthen their qualifications by obtaining a master's or doctoral degree.  In doing so, degree inflation can spread from entry level positions to mid-level management positions too.

A job market that supports degree inflation provides businesses with a number of advantages.  Generally, college educated individuals produce higher quality work, communicate more effectively, possess stronger critical thinking skills, and have been exposed to techniques that allow them to be more innovative.  An oversupply of college educated individuals also increases the competition for open positions, which subsequently lowers the starting salaries these individuals are willing to accept.

Related Terms

discouraged worker, dislocated worker, employment gaps