The government's target of getting half of all young people into higher education could further erode the decreasing value of having a degree, according to Malcolm Brynin, a researcher at the Institute for Social and Economic Research at Essex University.
This year, a record 360,000 undergraduates began UK degree courses, 10,000 more than last year. But Dr Brynin warned that expansion has negative long-term effects for graduates, including overqualification, lower job status and smaller salaries.
It is estimated that graduates earn £400,000 more than non-graduates over a lifetime. But Dr Brynin, using data from the British Household Panel and the Labour Force surveys, found that the benefits of a degree were declining because of overqualification and graduate oversupply. "If too many people take degrees, their value goes down," he said.
Dr Brynin suggested that expanding higher education was a belated government response to a skills shortage that should have been addressed 30 years ago. He said the UK had not invested in the right skills and had found itself locked into a system of non-vocational qualifications.
The government must ensure that the policy delivers what is needed, he said. "Our key investment should be in keeping people in education post-16. Higher education may not be the best way. There may be more rational and cost-efficient ways."
But he added: "There are not and probably never can be too many (graduates), and it is impossible to have too much education. However, the role of the graduate has changed over time as a result, probably, of increased supply and changing employment practices. The combined effect is a fall in the rewards to higher education."
Dr Brynin's paper Graduate Density, Gender and Employment was published in the British Journal of Sociology .