Remote work is worsening youth unemployment: New York Fed
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Both remote work and youth unemployment have been rising since the Covid pandemic, and the two trends are linked, according to new research from the Federal Reserve Bank of New York.
New York Fed economists wrote that the unemployment rate among young college graduates rose from 3.6% in March 2019 to 5.6% in March 2026. a blog post It was published on Monday. They estimate that remote work could account for 64% of the latest increase.
“Employers may not want to recruit new graduates to different teams because it is more difficult to teach them the necessary skills remotely,” the authors said.
While the impact of artificial intelligence on entry-level jobs has received a lot of attention lately, the proliferation of remote work is likely having a larger impact on youth unemployment, they wrote.
New York Fed researchers compared unemployment rates between inexperienced and more experienced workers in “remote-control” jobs, such as software engineers and financial analysts, and “non-remote-control” jobs, such as funeral home directors and nurses. They also used private data from an unnamed Fortune 500 company.
According to Gallup, very few Gen Z workers (6%) prefer to work entirely in the field questionnaire Found from May 2025. Most, 71%, said they preferred a hybrid arrangement.
By 2024, industries with higher rates of remote work showed larger increases in productivity research By the US Department of Labor.
But companies may be hesitant to hire inexperienced workers who won’t be in the office, New York Fed researchers wrote.
“Remote work has weakened incentives to hire young workers by hindering on-the-job training,” they wrote.
However, even companies that offer remote work often need to spend several days on-site, providing room for collaboration and mentoring, said Nicholas Bloom, an economics professor at Stanford University who studies remote work.
“I don’t think there’s any evidence that this is slowing employment,” Bloom said. “It’s actually the opposite, because it’s easier for people to work and therefore the labor supply seems to be increasing.”
‘Lasting results’ for university graduates
New York Fed authors wrote that employees who work apart from their colleagues may receive less feedback, which can especially hinder the development of new members of the workforce.
Their research also found that a Fortune 500 company hired fewer inexperienced workers during the pandemic due to the challenges of providing remote training and mentoring; This dynamic may now play out more broadly with widespread remote working, they said.
“High unemployment rates among young college graduates are particularly concerning because early career experiences can have lasting consequences,” according to the blog post.
