The Federal Reserve Bank of New York has released a study revealing that remote work, rather than artificial intelligence, is a significant factor contributing to higher unemployment rates among recent college graduates. The study indicates that businesses are more reluctant to hire young, inexperienced workers for remote positions due to the challenges of providing effective training and mentorship outside of a traditional office setting.
Impact on Young Graduates
According to the study, the unemployment rate for young college graduates in jobs that can be performed remotely, such as software development, has increased by about 1 percentage point from 2017-2019 to 2022-2024. In contrast, older workers in these fields have seen a slight decline in unemployment rates. This disparity highlights the difficulties young graduates face in securing employment in remote-capable roles.
The study, led by New York Fed research economist Natalia Emanuel, suggests that remote work has weakened the incentives for businesses to hire young workers. Employers find it challenging to provide on-the-job training and mentorship to new graduates working remotely, leading to a preference for hiring more experienced workers who require less guidance.
Comparison with Non-Remote Jobs
In contrast, the study found little difference in unemployment rates between older and younger college graduates in non-remote jobs, such as nursing. This pattern also holds for individuals without college degrees, indicating that the challenges associated with remote work are particularly pronounced for young graduates entering the workforce.
Broader Employment Concerns
The study’s findings come amid growing concerns about the employment prospects of college graduates as artificial intelligence continues to evolve in various white-collar sectors. However, the study notes that the worsening employment situation for young college graduates predates the development of AI tools like ChatGPT. The unemployment rate for college graduates under 29 rose by 20% from before the pandemic, reaching an average of 3.7% in 2022-2025.
Detailed data from a Fortune 500 tech company mirrored these findings, showing a shift towards hiring more experienced workers during periods of remote work. Once offices reopened, the company resumed hiring younger workers but continued to favor experienced candidates for remote teams.
Original reporting: WTVQ (Lexington) — read the source article.
