The past century has been characterised by an enormous expansion of higher education (HE) around the world and Portugal is no exception. The educational attainment of the Portuguese population has been historically lower than other developed countries but Governments from different political parties have implemented reforms and made huge investments to narrow the gap and meet the standards of other countries. The expansion of HE started at 1990s and major growth occurred with the Bologna Reform in 2006. Since then, a couple of topics related with education and labour market have emerged, exploring the consequences of HE expansion. This research examines the impacts of the increasing supply of graduates on the benefits of HE in the last decades. Our focus in on the jobs assigned to graduates and the education premium. The empirical evidence shows changing recruitment criteria by type of occupation. Bachelors’ degree holders tend to occupy jobs previously assigned to non-graduates, while master degree is becoming the minimum requirement for highly skilled occupations. The increasing supply of graduates benefits the industries that graduates traditionally find less attractive but raises concerns about overqualification in the Portuguese labour market. It seems that a master’s degree is the new basic higher education diploma; this raises doubts as to the role of bachelor’s degree in Portugal. The returns to HE are high but decreasing. The labour market did not differentiate bachelor’s and master’s graduates at the start of the Bologna Process. However, there is evidence on the growing gap between the wages of the two levels of HE degrees, showing a devaluation of the bachelor’s diploma from 2009. This evidence has raised social alarms on the benefits of HE and discussion on the role of skill development systems to sustain productivity growth and consequently help promoting better jobs, especially for young people.

--