An anonymous reader quotes an NPR report: The buzz on college campuses is that AI is disrupting the labor market for young university graduates. But new research of the Federal Reserve Bank of New York finds that the culprit may be something else: remote work. An analysis of federal employment data, along with a deep dive into flexible work arrangements at an unnamed Fortune 500 technology company, reveals that companies are less likely to hire recent college graduates for occupations that can be done remotely.
Researchers speculate that employers are reluctant to put such workers in an environment where it is more difficult to absorb lessons from their coworkers. The researchers found that the unemployment rate among the youngest college graduates (those under 29 years old) increased by 20 percent after the pandemic, while unemployment among older college graduates decreased slightly. The study compares unemployment rates before the pandemic, from 2017 to 2019, with unemployment rates after the pandemic, from 2022 to 2024. Unemployment increased as remote work quadrupled, the researchers write. “Our analysis suggests that these trends are related, as remote work makes it difficult for managers to train and mentor new employees.” Regardless of the cause, the New York Federal Reserve report warns that a high unemployment rate among young college graduates is concerning.
“Early career experiences can have lasting consequences,” the researchers write. “Research finds that people who began their job search in more relaxed labor markets tend to have lower earnings and slower career progression compared to comparable peers who began their job search in better market conditions.”
Additional reading: Why is the American job market so difficult, especially for recent college graduates?
