washington – The rise in remote work since the pandemic has made companies reluctant to hire young, inexperienced workers, a key driver of rising unemployment among recent graduates, a study released Monday found.
The study, conducted by the Federal Reserve Bank of New York, compared jobs that can be done remotely, such as software development, with jobs that are done in-person, such as nursing. The study found that the unemployment rate for young college graduates in “remote-capable” jobs increased by about 1 percentage point from 2017-2019 to 2022-2024.
However, unemployment rates for older workers (29 years and older) in these sectors have declined slightly, resulting in significantly higher unemployment rates for younger college graduates in jobs that allow remote work compared to older workers.
But for non-remote jobs, the study found little difference in unemployment rates between older and younger college graduates. A similar pattern exists for people without a college degree, according to the New York Fed.
The study, led by New York Fed research economist Natalia Emanuel, concluded that companies are reluctant to hire new college graduates to work remotely. This is because training and mentoring them becomes difficult when they work outside the office. The study’s authors calculate that remote work is responsible for nearly two-thirds of the rise in unemployment among young college graduates since the pandemic.
“Remote work hinders on-the-job training, reducing incentives to hire young workers,” the study says. “Employers may not want to hire new graduates into distributed teams because it is difficult to teach them the necessary skills remotely.”
The study comes amid growing concerns about the employment prospects of university graduates as artificial intelligence makes inroads into a variety of white-collar jobs, including finance, law, entertainment and media. This spring, university graduates were booed when they mentioned AI in their commencement speeches.
However, the study points out that the deteriorating employment situation for young university graduates predates the development of artificial intelligence tools such as ChatGPT. When the authors examined the exposure of various occupations to AI, they found that AI had little impact on youth unemployment.
The unemployment rate for college graduates under the age of 29 has increased by 20% since before the pandemic, averaging 3.7% from 2022 to 2025, according to the New York Fed. The unemployment rate for college graduates aged 22 to 27 reached 5.8% last year, the highest non-pandemic period since 2012.
This finding is consistent with a job market with fewer jobs and fewer layoffs, where layoffs are low and the unemployment rate is roughly stable, but the unemployed struggle to find new jobs.
The New York Fed study also looked at detailed data from anonymous Fortune 500 technology companies and found that their hiring patterns mirrored those seen in the broader data.
When the company’s offices were closed and employees worked remotely, “companies reduced inexperienced workers and hired more experienced workers, who may need less guidance to do their jobs well,” the study says.
“Once offices reopened, companies returned to hiring younger employees,” the study said. But even after reopening, the company prioritized experienced employees for teams that included remote work.
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