Like the eyespots on a peacock's tail, university degrees have long been a way of standing out from the crowd. So what are the implications if the expansion of higher education means that "degrees no longer differentiate people in the job market" and have become more like "fake designer handbags at fancy dinner parties"

Such were the questions posed by Mate Fodor, who is completing a PhD at the Free University of Brussels, at this year's Nobel Laureate Meetings in Lindau, Germany.

Held last week, they offered 373 young economists the chance to exchange views with 17 of the 38 living economics laureates.

There is now good evidence, argued Mr Fodor, that "higher education - in particular postgraduate education - is constantly losing its value in the job market".

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Yet at the same time, European directives such as the Lisbon Strategy - not to mention the policy of many individual governments - aim to expand the number of graduates in the hope of creating a "knowledge-based economy".

The predictable result, said Mr Fodor, is that record numbers of graduates "encounter record levels of unemployment or 'underemployment', where the qualifications they have obtained are not being put to use...Monstrosities such as MScs working at fast-food restaurants" are only extreme cases.

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In general, Mr Fodor believes that governments get a far better return on their investment from boosting the levels of secondary, primary and even pre-school education than through a focus on higher education. But does he actually oppose the common ideal of increasing the proportion of young people going to university?

"If you want to maintain the number of graduates," he said, "give them more choice. Now people with a very broad range of abilities end up with the same pieces of paper.

"Introducing a more refined choice of qualifications, such as something intermediate between a BA and a masters, would clear the way for us to show off the diversity within us and mean that everybody could have their distinctive eyespots again."

Nonetheless, given the inevitable funding constraints, Mr Fodor is sceptical of any plans to expand the higher education sector.

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"There are too many graduates who come out of college and don't know what the story is," he said. "If we can increase quantity and quality at the same time, do it. If not, we should decrease the number of graduates - and focus on nurseries and lower levels.

"In my native Hungary, they are now trying to decrease the number of university places by 40 per cent."

matthew.reisz@tsleducation.com.