Young and unemployed? Remote work, not AI, may be the problem, study finds

Research from the Federal Reserve Bank of New York reveals that the shift to remote work since the pandemic has disproportionately increased unemployment rates for recent college graduates, particularly in occupations that can be performed remotely, such as software development.

Key Findings

• Unemployment among young college graduates (under 29) in “remotable” jobs rose by about 1 percentage point from 2017-2019 to 2022-2024.
• Older workers (29+) in the same fields saw a slight decline in unemployment, widening the gap between younger and older workers in remote roles.
• In non-remotable jobs (e.g., nursing), unemployment rates remained similar across age groups.
• Remote work accounts for nearly two-thirds of the rise in unemployment for young college graduates since the pandemic.
• For college graduates aged 22–27, unemployment reached 5.8% in 2023, the highest outside the pandemic since 2012.

Why Remote Work Impacts Young Workers

Employers are hesitant to hire inexperienced graduates for remote roles due to challenges in training and mentorship. A case study of a Fortune 500 tech company found:

• During full remote work, the company hired fewer inexperienced workers and more experienced ones.
• After reopening offices, hiring of younger workers resumed but remained lower for teams with remote components.

AI’s Limited Role

The study notes that while AI has raised concerns about job displacement, it has had little impact on youth unemployment. The decline in hiring for young graduates predates the widespread adoption of AI tools like ChatGPT.