California is projected to fall about one million college graduates short of its work-force needs by 2025, according to a report released today by the Public Policy Institute of California.

The report, which analyzes demographic and college-going trends, says that unless the state makes policy changes to increase enrollment and graduation rates, only 35 percent of the state’s working-age adults will have a bachelor’s degree by 2025. By contrast, about 41 percent of its working-age adults are expected to need a college degree by then, the report says.

The projected shortfall can be blamed on two demographic forces, the report says: the retirement of well-educated baby boomers and a population shift toward groups, especially Latinos, that typically have had low graduation rates. In addition, it says, the recession’s financial impact on public institutions makes it highly unlikely that the state will be able to quickly increase college attendance or graduation rates.

However, the report, “Closing the Gap: Meeting California’s Need for College Graduates,” suggests that the state could cut its deficit of college graduates in half without breaking the bank. The most cost-effective options, it says, would be to support programs that improve graduation rates at California State University and improve transfer rates to universities from the state’s community colleges.

“The good news is the state can dramatically improve the prospects for its economic growth and the futures of its young-adult residents with relatively modest investments in the pathways students take to college graduation,” Hans Johnson, an associate director at the institute and a co-author of the report, said in a written statement. —Josh Keller