AI Is Eliminating Entry-Level Positions for Young Graduates

Over twenty years, France has doubled the share of young people leaving higher education with a long-form degree. In 2021, 24% of young people exit the education system with a higher education diploma, compared with 11% in 2004 [1]. Result: 53% of 25-34 year-olds in France hold a higher education qualification, versus 48% on average across OECD countries [2]. France trains more people than its neighbors, at least in volume. The problem is what happens next.

More graduates, more underemployment

Underemployment is simple to understand: someone with a bachelor’s degree or higher working in a job that doesn’t require one. Between the 2004 cohort and the 2021 cohort, the underemployment rate of young graduates rose from 26% to 32% [1]. One in three young graduates works in a position below their level of qualification. This trend has persisted over twenty years.

The increase is concentrated in intermediate levels. The six-point rise affects primarily the two-to-four-year post-secondary bracket [1]. A holder of a bachelor’s degree or professional bachelor’s diploma (BUT) therefore has a greater chance than twenty years ago of ending up in a position that doesn’t require their qualification.

A diploma remains protective, but less so in France than elsewhere. In 2025, across OECD countries, 4.9% of young adults with higher education qualifications are unemployed [2]. In France, this rate reaches 6.3% [2]. The gap seems small. Yet it reveals something structural: at the same qualification level, France protects its workers less well from labor market exclusion than the average of its peers.

Open access for all, success reserved for a few

The architecture of entry into higher education explains part of this gap.

France has the highest higher education access rate in the OECD: 95% of applicants obtain a place [2]. Yet only 34% earn their bachelor’s degree in three years, compared with 43% on average across the OECD. In four years, 46% compared with 59% [2]. Access is nearly universal; success remains the privilege of a minority.

Social inequalities are triggered even before entry. In France, 75% of 25-34 year-olds with at least one parent holding a higher education qualification obtain a higher education diploma, compared with 32% of those whose parents did not complete upper secondary school [2]. A ratio of one to 2.3 between these two groups. Marie-Paule Couto, Fanny Bugeja-Bloch, and Leïla Frouillou have shown that Parcoursup pushes young people to express preferences that reflect their social background and high school of origin rather than their ambitions [6].

The causal chain is clear: the disadvantaged self-select downward from the moment of expressing preferences, end up in underfunded programs, drop out more often, or obtain a diploma without matching employment. Massification has opened the doors of higher education without redistributing the conditions for success within.

AI closes junior positions

To this structural pressure is added a rupture from elsewhere.

The software wave mainly made middle-class jobs scarce. The AI wave targets skilled jobs. In the United States, holding a degree now appears to announce an unfavorable trajectory, to the point that Axelle Arquié, of the Observatory of Threatened Jobs, observes that “the diploma no longer protects” [7]. In France, the major schools’ survey on graduate employment shows an employment rate down by 5 points [7].

The mechanism is precise. AI fragments intellectual work the way the assembly line fragmented manual work: a machine performs tasks, a human verifies the results. Skills become less rare, the capacity to negotiate erodes. Arquié speaks of “proletarianized consultants” [7].

This shock targets entry-level career positions. Researchers from Stanford and Harvard have shown that the more a company adopts AI, the fewer young talents it recruits. In 2025, junior jobs in professions highly exposed to AI automation declined by 13% in the United States [12].

Daron Acemoglu had long estimated that 5% of jobs were threatened [8]. The arrival of autonomous agents led him to revise this figure upward. His message is now to steer AI toward complementarity with humans, and quickly [8].

Universities suffocating at the moment they should adapt

Faced with these two combined pressures, French universities lack the money to respond.

France Universités notes that in 2026, nearly all universities voted initial deficit budgets [13]. In 2024, 58 universities out of 70 closed the year in deficit, compared with 27 in 2023 and 21 in 2022 [13]. The deterioration is continuous.

Staffing follows the same trajectory. The ratio of tenured faculty per hundred students fell from 5.05 to 4.40 between 2012 and 2022, a drop of nearly 13% in ten years [2]. France spends 13,300 euros per student in 2024. This spending fell by 1.4% in constant euros over the year [6]. Student numbers are growing; resources are stagnant or declining.

Public funding represents 75% of the resources of French higher education, compared with 66% on average across the OECD [2]. In most other countries, families contribute more. This model has an obvious social virtue. It also has a systemic flaw: the state alone finances, without linking this funding to success outcomes or to the location of real economic needs.

Changing who pays and who decides on orientation

The 2027 budget decision goes beyond putting a few million more into universities. The architecture that produces both underfunding and underemployment must be transformed.

Two locks must be broken together. The first concerns who decides on orientation. Parcoursup, in its current architecture, delegates to each institution the criteria for selection, without any obligation of transparency or accountability for social inequalities produced [6]. Making the right to transparent orientation binding, publishing the ranking algorithms institution by institution, and conditioning the public label on measurable targets for social diversity: these three steps change who decides and on what basis.

The second lock concerns who pays. French universities are funded 56% by the central state, mainly because the state accounts for the bulk of faculty compensation and scholarship grants [2]. This steering via payroll creates no incentive for student success or for adapting training to market needs, including facing AI.

Introducing a share of public funding tied to graduation rates and actual employment outcomes, region by region and field by field, shifts competence from uniform allocation to outcome-oriented allocation. Institutions that advance first-generation students, or that adapt their curricula to emerging professions, would receive more. Those that accumulate deficits without changing either their offerings or their success rates would receive less. Philippe Aghion, in his report on AI submitted to the government in 2024, argued for training investments based on competitiveness rather than dependency: the same logic applies to universities [8].

This choice transforms funding per enrolled student into funding per graduated and employed student. Regional governance, armed with measurable and public targets for success and employment, shares with the central state the decision on allocation [13]. In 2025, universities in deficit eliminated approximately 30,000 bachelor’s and master’s places at the start of the school year [13]. Without an architectural change, these cuts will deepen the inequalities they are supposed to reduce.

Sources

[1] CEREQ, Ilardi V., Lecari L., Merlin F., “Entering an Unstable World: The Diploma Remains a Safe Bet,” Céreq Brief no. 487-488, July 2026, https://www.cereq.fr/enquete-2024-aupres-de-la-generation-2021-sinserer-dans-un-monde-instable-le-diplome-reste-une (accessed 25/09/2026).

[2] OECD, “Education at a Glance 2025: OECD Indicators: Country Notes France,” September 2025, https://www.oecd.org/content/dam/oecd/fr/publications/reports/2025/09/education-at-a-glance-2025-country-notes_9749f4ff/france_0639c7fb/aca6dceb-fr.pdf (accessed 25/09/2026).

[3] DEPP, Information Note, “Public Expenditure per Pupil or Student in France and the OECD,” September 2025, https://www.ekole.fr/blog/la-depense-nationale-deducation-atteint-197-1-milliards-en-2024 (accessed 25/09/2026).

[4] Axelle Arquié, CEPII / Observatory of Threatened and Emerging Jobs, “AI and Employment: Mapping New Frontiers” (Coface and OEM, 2026); interview Élucid, September 2026, https://elucid.media/societe/l-ia-menace-deja-le-travail-et-les-diplomes-vers-une-generation-perdue (accessed 25/09/2026).

[5] Daron Acemoglu and Simon Johnson, “The Simple Macroeconomics of AI,” Economic Policy, 2025, https://doi.org/10.1093/epolic/eiae042; IMF Finance & Development, “Rebalancing Artificial Intelligence,” December 2023, https://www.imf.org/fr/publications/fandd/issues/2023/12/rebalancing-ai-acemoglu-johnson (accessed 25/09/2026).

[6] Senate, debate of 6 March 2024 on Parcoursup, https://www.senat.fr/cra/s20240306/s20240306_2.html; Couto M.-P., Bugeja-Bloch F., Frouillou L., cited in Senate bill proposal no. 447, 17th legislature (accessed 25/09/2026).

[7] Axelle Arquié, CEPII / Observatory of Threatened and Emerging Jobs, “AI and Employment: Mapping New Frontiers” (Coface and OEM, 2026); interview Élucid, September 2026, https://elucid.media/societe/l-ia-menace-deja-le-travail-et-les-diplomes-vers-une-generation-perdue (accessed 25/09/2026).

[8] Philippe Aghion and Anne Bouverot, report to the government, “AI: Our Ambition for France,” March 2024; lecture series at the Collège de France 2024-2025, “Rethinking Capitalism: The Power of Creative Destruction,” https://www.college-de-france.fr (accessed 25/09/2026).

[9] Stanford / ADP data on AI and junior employment, cited in Axelle Arquié, Observatory of Threatened Jobs, January 2026, https://www.maddyness.com/2026/01/22/impact-ia-emploi/ (accessed 25/09/2026).

[10] Ministry of Higher Education and Research, SIES, “Education Expenditure for Higher Education,” State of Higher Education, Research and Innovation in France no. 19, 2025, https://publication.enseignementsup-recherche.gouv.fr/eesr/FR/T496/la_depense_d_education_pour_l_enseignement_superieur/ (accessed 25/09/2026).

[11] France Universités / L’Étudiant Educpros, “In Universities, the Impact of Underfunding Already Concrete for Students,” December 2025, https://www.letudiant.fr/educpros/enquetes/pourquoi-la-majorite-des-universites-seront-en-deficit-a-la-fin-de-lannee.html (accessed 25/09/2026).

[12] Stanford / ADP data on AI and junior employment, cited in Axelle Arquié, Observatory of Threatened Jobs, January 2026, https://www.maddyness.com/2026/01/22/impact-ia-emploi/ (accessed 25/09/2026).

[13] France Universités / L’Étudiant Educpros, “In Universities, the Impact of Underfunding Already Concrete for Students,” December 2025, https://www.letudiant.fr/educpros/enquetes/pourquoi-la-majorite-des-universites-seront-en-deficit-a-la-fin-de-lannee.html (accessed 25/09/2026).