Is a university degree still the same passport to success?
- The supply/demand relationship underlying graduate jobs in advanced economies is changing
- More university graduates are struggling to obtain jobs related to their qualifications
- They are looking for other ways to distinguish themselves, knowing that increasingly, a degree is not enough to get them the job and career they want
At first glance, the fact that there are more university graduates than ever in advanced economies seems like it could only be positive. The reality is more complicated.
On the one hand, a strong proportion of workers with post-secondary degrees is a win for the economic potential and stability of a country. More education often means the chance at a better job. And when people have jobs that match their level of education, they are more likely to feel satisfied, pay bills, support their families, and feel financially secure.
But this supposes that there is a positive relationship between demand for and supply of graduate-level jobs. In recent years, this relationship has been breaking down. This is because the large proportion of university graduates also means there is more competition for graduate-level jobs, and at a time when (1) President Trump’s tariffs and rhetoric are destabilising economies across the world, and (2) AI is reducing hiring for some entry-level jobs.
The supply/demand imbalance is profoundly affecting the perceived value of a university degree. This naturally has massive implications for colleges and universities.
The Scarcity Principle
The Scarcity Principle is an economic theory that holds that the scarcer a resource or product is, the more it is valued by consumers and employers. In our context, higher education degrees are becoming less scarce, and so they are losing the edge they used to provide job candidates in the marketplace.
Speaking with The Guardian earlier this month, Professor Shitij Kapur, vice-chancellor of King's College London, said that previously, a degree might be considered a passport to a good job. Now, he says, it is now more akin to a visa. The visa allows graduates to enter a tier where there is potential for – but not a guarantee of – professional success.
Even as a visa, the degree is becoming less reliable. There is a graduate unemployment crisis in many advanced economies. For example:
- Statistics Canada data shows that job vacancies requiring a bachelor’s degree and under three years of work experience have more than halved since early 2024 (see chart below).
- In the US, the overall unemployment rate was 4% in Jan-May 2025, but the rate spiked to 6.6% for new college graduates aged 20–24 with bachelor’s degrees. This marked the highest unemployment level for this group in a decade.
- PwC data shows that the share of recent graduates in graduate-level jobs in the UK in 2025 was lower than at any point since 2014.
Faced with the capacity of AI to erode jobs as well as a fragile global economy, youth need more from higher education than a traditional degree.
This prompts a number of questions. What does it take now for new graduates to differentiate themselves? What does this mean for higher education institutions in terms of what they deliver to students?
Attending one institution versus another could make the difference
Prof Kapur says that in advanced economies, the value of attending a prestigious institution/programme is increasing:
“The competition for graduate jobs is not just all because of AI filling out forms or AI taking away jobs. It’s also because of the stalling of our economy and causing a relative surplus of graduates. So, the simple promise of a good job if you get a university degree, has now become conditional on which university you went to, which course you took.”
In other words, the proportion of university graduates is expanding but the proportion of graduates with a prestigious degree is not expanding in tandem. This increases the marketplace premium of elite university degrees.
The growing need for a “degree plus”
Of course, most students would love to enrol in a prestigious university, but there are only so many seats available in such institutions. Without that advantage, how can these students gain a competitive edge when they graduate and look for a job?
Many are applying for programmes that include work placements, often known as “work integrated learning” (WIL), a broad category that includes co-op placements and internships (see here for the differences between different forms of WIL).
Demand is soaring for WIL. Almost half of 42,000 prospective international students (47%) responding to a global 2025 Keystone Education Group survey said that the availability of internships is the most attractive feature an institution can offer. This priority was second only to “affordable fees”(60%) and significantly ahead of other major considerations such as accommodation and even employability, as shown in the chart below.
Work placements provide an edge
Recent research shows that completing a WIL programme can help graduates to earn significantly more money than graduates who do not participate in a work placement.
For example, Toronto-based consultancy Regionomics analysed a large database of university and college graduates in 2023 to determine whether those who participated in a co-op programme earned higher salaries than others three years after graduating from a higher education institution. The research found that:
“Those who did not participate in the co-op programs were more likely to have earned less than C$50,000 than those who participated in the co-op programs while they were students. The former co-op students were more likely to have earned over C$50,000 than their non-co-op peers. The differences in salary persisted even three years after graduation.”
Similarly, a 2023 study by CEWIL Canada, a company that facilitates WIL opportunities, found that 91% of students found jobs related to their studies after participating in a WIL programme, a significantly higher percentage than the 71% of students who did not.
Other research findings highlight similar trends. For example:
- In a 2022 National Association of Colleges and Employers (NACE) survey, employers said that “having an internship with our organisation” or “having an internship within our industry” were the most influential factors in helping them choose between two job candidates.
- LinkedIn data published in 2024 found that students who complete an internship are roughly 25% more likely than other students to be hired for a full-time position within six months of graduation.
- According to a NACE survey of 247 US employers, more than 70% of employers planned to maintain or increase hiring of interns in 2025.
A compelling differentiator for universities and colleges
Universities and colleges that deliver a range of strong WIL opportunities have an increasingly important offer to students, and most of those institutions are fully aware of this and promoting themselves accordingly.
Other ways of adding values to degrees include:
- Including more practical components in traditionally theory-based programmes;
- Offering students skills-based transcripts that allow graduates to articulate their competencies to employers looking for specific skills;
- Strengthening career services’ capabilities to increase graduate employment rates;
- Reviewing programmes to determine if there is enough of a career-readiness element to their design;
- Encouraging students to focus on real-world problems and settings for final papers and theses.
Any effort to improve graduate employment outcomes is an effort worth making. Offering work-integrated learning is a solid choice, but there are other ways to increase the value of a degree for young university students faced with a challenging job marketplace.
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