Polish Labor Market Reality Check: Degrees No Longer Guarantee High Earnings

The financial return on a university degree in Poland has diminished considerably over the past two decades, with the earnings premium for graduates shrinking from 73% in 2004 to just under 59% in 2024 compared to individuals with only primary education.

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While in 2004, employees with university degrees earned on average 73% more than those employed in simple jobs who had completed at most primary school, two decades later, in 2024, this premium for higher education was significantly lower – just under 59%.

This trend has impacted men and women differently. For men, the premium decreased from 74% to 63%, a reduction of one-sixth. However, for women, the premium saw a more substantial drop, shrinking by nearly a quarter from 71% to 55%. These findings come from an analysis by Sylwia Roszkowska and Aleksandra Majchrowska of the University of Łódź, based on data from companies employing at least 10 people.

The analysis, covering 2004-2024, revealed that while each additional level of education increased average wages, the return on investment in education declined. In 2004, obtaining a higher degree boosted salaries by an average of 17.2%, but by 2024, this premium had fallen to 15.5%. Men experienced a smaller decrease, with their average premium for further education dropping from 16.3% to 15.7%, while women's premium, initially higher, fell more sharply from 18.2% to 15.4%.

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For men, it decreased from 74% to 63%, a reduction of one-sixth, whereas for women, it shrank by almost a quarter – from 71% to 55%.

Researchers note that the shift disadvantageous to women occurred after 2018; prior to that, their educational return was higher. The widespread increase in higher education, particularly among women, is cited as a major factor. In 2004, one in five employees held a university degree; by 2024, this figure more than doubled to 43%, with women comprising 53% of degree holders. Projections suggest this trend will continue, as women constitute 58-60% of university graduates in recent years.

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The return on investment in education was falling. While in 2004, obtaining another level of education increased wages by an average of 17.2%, by 2024, this premium had dropped to 15.5%.

Aleksandra Majchrowska highlighted that a university degree is no longer a distinguishing factor for specialists and managers but is becoming common even in professions where it is not strictly necessary. This saturation makes it harder for graduates to stand out in the job market. Furthermore, the analysis indicates that in the era of digitalization and standardization, long-term professional experience is losing its significance, further complicating graduates' career progression.

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The widespread increase in higher education, particularly among women, is a significant factor contributing to the sharp decline in returns for secondary and higher education in recent years.