What is a Paper Ceiling?

I recently listen to a Marketplace Radio segment about the role of Artificial Intelligence (AI) in filtering job applications. The segment specifically highlighted the bias introduced when the software is designed to “overlook” applicants who are qualified for the job, but do not have a degree. These applicants are also referred to as “Skilled Through Alternative Routes” or also known as STAR.

During the show, there was a reference to the “Paper Ceiling”. I had never heard of that term and as a person that loves to learn new things, I was eager to investigate. I have linked to the Marketplace segment for your reference. Below, I share what I learned about paper ceilings.

What is a Paper Ceiling?

The paper ceiling is the barrier that keep those without a degree from being considered qualified for jobs that require degrees. The fraction of the labor market that has a high school degree only makes up 28% of the labor force. The unemployment rate for those without a college degree is 6.1%, much higher than the 3.5% unemployment rate for college graduates or 2.4% for those with advanced degrees.

Changing Labor Market

Increased educational attainment has been the path for improved job prospects with higher incomes and lower unemployment rates. However, the tight labor market has forced companies to reevaluate the degree requirement. A welcomed change for STAR individuals. It is not clear how this will play out as labor markets change. It is also unclear what will happen to the value of higher education. The perceived benefits of higher education have been declining over the past several years. For those of us in higher education, removing the paper ceiling will impact us negatively.