Impact of Remote Work on Young College Graduates’ Employment

The shift to remote work since the pandemic has impacted the employment rates of young, inexperienced workers. A study by the Federal Reserve Bank of New York highlights this issue, linking remote work to higher unemployment rates among recent college graduates.

The research focuses on job categories that are suitable for remote work, such as software development, and contrasts them with jobs requiring in-person presence, like nursing. Findings indicate that the unemployment rate for young college graduates in remote-capable jobs increased by approximately 1 percentage point from the 2017-2019 period to 2022-2024. In contrast, the unemployment rate for older workers 29 and over in the same fields declined slightly, widening the gap between younger and older graduates in these occupations.

In-person jobs, on the other hand, do not show a significant difference in unemployment rates between younger and older college graduates. This trend is also seen among individuals without college degrees, according to the study led by Natalia Emanuel, a research economist at the New York Fed.

The reluctance of businesses to hire new college graduates for remote roles stems from the challenges of training and mentoring in a remote setting. The study attributes nearly two-thirds of the increase in unemployment rates for young college graduates since the pandemic to remote work.

The report comes at a time of growing concern over job opportunities for college graduates as artificial intelligence (AI) influences various white-collar jobs. Despite AI’s increasing presence, the study notes that the adverse employment trends for young college graduates began before AI tools like ChatGPT emerged.

Youth unemployment for college graduates under 29 increased by 20% from before the pandemic, reaching an average of 3.7% in the 2022-2025 period. For those aged 22 to 27, unemployment peaked at 5.8% last year, the highest outside the pandemic period since 2012.

The study also examined data from an unnamed Fortune 500 tech company, finding that its hiring practices reflected broader trends. During office closures and remote work periods, the company favored hiring experienced workers over younger, inexperienced ones. After reopening, the company resumed hiring younger workers but continued to prefer experienced employees for roles that involved remote work.