The New York Federal Reserve Bank released an analysis Monday linking the rise in youth unemployment since the pandemic to the dramatic increase in remote work. The report, which examines labor market trends, suggests that employers are less willing to hire recent graduates for distributed teams because of the challenges in training them remotely.
Census data cited in the report shows that the unemployment rate for college graduates under 29 has climbed 20 percent—from an average of 3.1 percent in 2017–2019 to 3.7 percent in 2022–2025. In contrast, joblessness among older graduates has remained relatively stable.
“We document that one factor contributing to youth unemployment is the four-fold rise in remote work since the pandemic,” the economists wrote. “Employers may not want to hire fresh graduates onto distributed teams because it is more difficult to teach them the requisite skills from afar.”
The report highlights that youth unemployment spiked to 3.67 percent in 2020 during COVID-19 lockdowns, while the rate for graduates over 29 was just 1.99 percent that year. The pandemic accelerated a shift toward remote work, with four key industries—scientific and technical services, information, finance and insurance, and management—seeing over 39 percent of their workforce remote in 2021, up from under 17 percent in 2017, according to Bureau of Labor Statistics data.
While many firms still offer remote or hybrid schedules, there has been a growing push to return to in-person work. That effort faces resistance: a Pew Research survey last year found that 61 percent of fully remote workers would likely leave their jobs if forced back to the office, with those under 50 more opposed than older employees.
The New York Fed also addressed concerns about generative AI’s impact on young workers, noting that the rise in joblessness “predates the rapid diffusion of AI.” However, the report warns that “generative AI and other factors may play a more primary role in determining the employment patterns of younger workers going forward.”
This analysis comes amid broader debates about workforce policies, including recent moves to reclassify federal workers. Meanwhile, international issues like the indoctrination of abducted Ukrainian youths and youth climate lawsuits continue to shape the political landscape.
“Nonetheless, the evidence to date suggests that the rise of remote work has meaningfully contributed to the recent challenges facing young college graduates,” the report concluded.
