A new study by the Federal Reserve Bank of New York has identified remote work as the primary driver behind increased unemployment rates for recent college graduates. The research, published Monday, compared occupations suitable for remote work, such as software development, with those requiring in-person presence, like nursing.
The study found that the unemployment rate among young college graduates in 'remotable' professions rose by approximately one percentage point between 2017-2019 and 2022-2024. In contrast, older workers aged 29 and above in these fields saw a slight decline in joblessness, creating a significant disparity. Non-remotable jobs showed little difference in unemployment rates between age groups.
Lead researcher Natalia Emanuel concluded that companies are hesitant to hire new graduates for remote roles due to challenges in training and mentoring outside a traditional office setting. The authors estimate that remote work accounts for nearly two-thirds of the increase in unemployment among young graduates since the pandemic began.
The study also examined data from a Fortune 500 tech company, finding that when offices were closed, the firm hired fewer inexperienced workers. After reopening, hiring of younger workers resumed, but teams incorporating remote work continued to favour experienced staff.
These findings come amid concerns about AI's impact on white-collar jobs, but the study notes that the deteriorating outlook for young graduates predates widespread AI tools. The unemployment rate for graduates under 29 rose 20% from pre-pandemic levels to 3.7% between 2022 and 2025, with those aged 22-27 reaching 5.8% last year, the highest outside the pandemic since 2012.
