Artificial intelligence continues to transform social domains rapidly. One of the most profound transformations is taking place in labor markets and, consequently, in education systems. AI technologies are swiftly altering the skill sets required by professions and job positions, rendering some occupations and roles obsolete. On the other hand, many high-level skills and competencies required by emerging or future job positions often have no equivalent in current education systems. Therefore, the severity of the disruptive effects that this transformation may cause in employment will largely depend on how quickly and accurately education systems – especially higher education – can respond to this rapid shift.
To answer this question, Larry Liu draws on Habermas’s framework of legitimation crisis and Collins’s theories of credential inflation and social closure to theorize the transformative impact of AI on higher education systems. In the context of higher education, Liu defines legitimacy as "the collective societal belief that obtaining a higher education credential is essential for obtaining secure and desirable middle-class jobs and maintaining or improving social mobility."
The fact that employability still increases with higher levels of education and that wages for degree holders remain relatively higher indicates that universities currently continue to maintain their legitimacy. Moreover, as AI transforms the labor market – eliminating many job positions while increasing the demand for new skills in those that remain – higher skill expectations in emerging or future occupations are likely to extend the duration of education, especially from the undergraduate level toward doctoral education. This suggests that the legitimacy of higher education may, in fact, increase. However, the critical issue here is how quickly and effectively higher education systems can harness this potential.
On the other hand, there is a growing trend in labor markets toward emphasizing skills over formal degrees. This shift is also evident in the rising interest in associate-level certificate programs and short-term qualification credentials. As Liu notes, private-sector employers such as IBM, Google and Delta Air Lines have begun to reduce degree requirements for certain positions. In many countries, there is a noticeable increase in efforts to promote apprenticeship programs. Furthermore, as wages for high school graduates have risen, the college wage premium has declined. Therefore, according to Liu’s projection, as students increasingly turn to non-college but lucrative alternatives, the downward trend in college enrollment may become permanent. An indirect contributing factor to this trend is the sharp decline in population growth rates and fertility rates in many countries. Most developed countries now have fertility rates well below the population replacement threshold. As a result, populations are aging, and the number of young people is shrinking. This profound demographic shift will also indirectly lead to a gradual decline in the demand for higher education.
As higher levels of education lead to increased employment opportunities and income, the demand for higher education remains consistently strong. Moreover, countries’ ambitions to enhance their economic competitiveness by cultivating a highly skilled workforce further accelerate this demand. Due to reinforcing mechanisms that stimulate rising demand, higher education systems have continuously expanded their capacities and, at a certain point, have begun to produce far more graduates than the labor market requires or than the number of available positions. This phenomenon – often referred to as “credential surplus” or “diploma inflation” – has devalued higher education qualifications and intensified competition for employment. As a result, individuals are compelled to pursue additional qualifications and certifications beyond what is actually necessary to stand out. This cycle has become a significant issue for many countries.
On the other hand, since the 1980s, technological disruptions – particularly the spread of automation – have begun to transform labor markets in ways that disadvantage middle-skilled workers. New job positions are increasingly being filled by highly skilled individuals. This shift has not only accelerated the erosion of the middle class but also made it more difficult for middle-income families to afford access to the high-level skills now required. In this process, the link between high-cost, high-quality higher education and affluent families has become significantly stronger.
As a result, even individuals with university degrees from middle-class backgrounds are increasingly losing their jobs or being pushed into lower-skilled and therefore lower-paid occupations. This trend compels a more realistic reassessment of the demand for higher education. As Liu also argues, when the cost of high-quality higher education – capable of ensuring good employment and decent wages – continues to rise, alternative pathways such as vocational schools or jobs that do not require a college degree become more appealing to the large segments of the population losing ground in the labor market.
AI holds the potential to significantly strengthen and expand automation, which has already contributed to the social rupture described above and has profoundly – yet unfairly – transformed the previously more equitable relationship between education and the labor market. Therefore, if no measures are taken to disrupt or at least weaken this powerful cycle, the legitimacy of higher education will decline for large segments of society. Liu also argues in his article that the unchecked advancement of AI may undermine the legitimacy of the higher education system. Furthermore, both the broader public and businesses have begun to recognize the benefits offered by AI – such as personalized learning experiences and its potential to boost the productivity of low- and mid-skilled workers. As a result, more people are turning toward vocational schools and short-term certification programs that enhance their resilience in the labor market. As Liu notes, businesses are increasingly shifting their focus toward skills-based hiring and are gradually removing the requirement for a college degree.
It is important to emphasize that the legitimacy crisis does not affect all universities equally. On the contrary, legitimacy is actually increasing for nationally and internationally prestigious, high-quality institutions. As noted earlier, these universities have significantly strengthened their connection to high-skilled employment compared to the past, resulting in a substantial rise in demand. Given the limited capacity of such institutions, the cost of access is also increasing. Consequently, the bond between these elite universities and affluent families has become even stronger. Therefore, the legitimacy crisis is primarily experienced by large, disadvantaged segments of society and the middle class, who are losing their footing in the labor market. In this context, the function of "social closure" described by Collins regains its significance, as access to high-value educational credentials becomes increasingly exclusive and selective.
In fact, the meritocratic system, once reinforced by an expanding and massified higher education sector, is undergoing a kind of mutation. As access to higher education becomes widespread among large segments of society, its value gradually diminishes, and it appears as though we are returning to an aristocratic order. The universities that are losing their value or legitimacy are generally those that emerged during the massification phase and lack a long-standing institutional history. The quality gap among institutions is deepening, and access to the highest-quality education is increasingly beyond the financial reach of the majority. As a result, institutions that once provided upward mobility and prosperity to the middle classes are now in decline. In short, if no corrective measures are taken, the world rapidly moves toward a new cycle of inequality and injustice.
