The prevalence of remote work may be largely to blame for the uptick in unemployment among recent college graduates, according to a new analysis from the New York Fed.

The rise of remote work since the pandemic has made businesses more reluctant to hire young, inexperienced workers and is the key driver of higher unemployment rates for recent college graduates, a study released Monday has found.

The study, by the Federal Reserve Bank of New York, compared occupations that can be done remotely, such as software development, with those that are done in person, such as nursing.

The study finds that the unemployment rate among young college graduates in “remotable” jobs rose by about 1 percentage point from 2017-2019 to 2022-2024.

Yet for older workers in those fields, those aged 29 and over, which made the jobless rate declined slightly, leading to a notably higher unemployment rate for younger college graduates in remotable occupations compared with older workers.

Conversely, the study found minimal differences in unemployment rates between older and younger college graduates in non-remotable positions.

A similar pattern was observed for individuals without college degrees, reinforcing the notion that remote work specifically impacts the entry-level workforce across various educational backgrounds.

The study, led by New York Fed research economist Natalia Emanuel,concludes that the primary driver behind this trend is the difficulty businesses face in effectively training and mentoring new college graduates when they are not physically present in an office setting.

The authors calculate that remote work is responsible for nearly two-thirds of the increase in the unemployment rate for young college graduates since the onset of the pandemic.

They emphasize, “Remote work has weakened incentives to hire young workers by impeding on-the-job training.

Employers may not want to hire fresh graduates onto distributed teams because it is more difficult to teach them the requisite skills from afar.”

This research emerges amidst broader concerns regarding the employment prospects of college graduates, particularly with the advancements in artificial intelligence.

However, the study clarifies that the worsening employment picture for young college graduates predates the widespread development of AI tools such as ChatGPT.

Furthermore, an analysis of different occupations’ exposure to AI revealed that artificial intelligence has had little impact on youth unemployment.

Statistically, the unemployment rate for college graduates under the age of 29 rose by 20% from pre-pandemic levels, averaging 3.7% in 2022-2025.

For the cohort aged 22 through 27, unemployment reached 5.8% last year, marking the highest rate outside of the pandemic period since 2012.

These findings align with the current “low-hire, low-fire” state of the job market, characterized by low layoffs and a relatively stable overall unemployment rate, yet persistent difficulties for those out of work to secure new positions.

Further supporting these conclusions, the New York Fed study incorporated detailed data from an unnamed Fortune 500 tech company.

This company’s hiring patterns mirrored the broader data: when offices were closed and staff worked remotely, the firm hired fewer inexperienced workers and a greater number of experienced professionals, presumably those requiring less mentorship.

Upon the reopening of its offices, the company reverted to hiring younger workers.

However, even after reopening, the company continued to favor more experienced workers for teams that included remote work components, indicating a sustained preference in specific contexts.