By Jessica Coacci

A recent analysis suggests remote work may be leaving younger workers on the sidelines, despite many firms and economists citing artificial intelligence as the main culprit.

Remote work can explain 64% of the recent increase in unemployment among young college graduates, according to an analysis from The New York Federal Reserve. In remote jobs, young people's unemployment rate increased by almost 1 percentage point between 2017-19 and 2022-24, the research found.

In non-remote roles, young graduates' relative unemployment rate ticked up in 2020 but returned to baseline soon afterward, the research found. In addition, even after accounting for occupations' exposure to AI, the differences between younger and older workers persist in both remote and non-remote roles.

While unemployment among those under 29 was 3.1% on average in 2017-19 that level rose 20% to 3.7% in 2022-2025, the New York Fed said. However, the unemployment rate for more experienced college graduates actually dipped from 1.9% in 2017-19 to 1.8% in 2022-25.

The data come as the U.S. economy has been stuck in a "low-hire, low-fire" jobs environment, generally favoring those who have a job rather than those searching for one. This has left many recent college graduates struggling to gain footing at a crucial part in their journey up the corporate ladder. While AI has made it easier for some firms to automate tasks entry-level workers once did to kickstart their careers, the research found the uptick in youth unemployment predates AI making its way across industries.

To measure their research, The New York Fed compared unemployment rates among people working in "remotable" jobs to those in "non-remotable" jobs. To categorize the jobs as remotable or non-remotable, the bank used a commonly used index of how easily the tasks required for a given job can be done when working from home.

A contributing factor traces to something vital for early career workers: mentorship. Using proprietary data from a Fortune 500 company, the research found when people work next to their colleagues, they receive more feedback on their output, and in turn, more mentorship. When they are separated (even by a short distance) that feedback tapers off dramatically, and younger workers could miss out on constructive feedback for their career development.

The research found that when the firm's offices closed due to the pandemic, they hired few inexperienced workers and more experienced ones who may need less mentorship. Even after reopening, firms hired more experienced workers on distributed teams.

Write to Jessica Coacci at jessica.coacci@wsj.com

(END) Dow Jones Newswires

June 01, 2026 14:41 ET (18:41 GMT)

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