New York Fed: Expansion of remote work causes surge in youth unemployment, AI impact is limited

An analysis by the Federal Reserve Bank of New York found that the surge in youth unemployment in the United States after the pandemic was due to the spread of remote work rather than the introduction of artificial intelligence (AI).

In a report released on the 1st (local time), the New York Fed analyzed that about two-thirds of the recent increase in unemployment among young college graduates is explained by the spread of remote work.

According to the report, the unemployment rate for people under the age of 29 in the United States rose from an average of 3.1% between 2017 and 2019 before the pandemic to 3.7% between 2022 and 2025 after the pandemic.

This rise in youth unemployment showed clear differences by occupation depending on whether or not remote work was possible.

In occupations that allow remote work, the youth unemployment rate increased by an average of about 1 percentage point from 2022 to 2024 compared to 2017 to 2019, while the unemployment rate for older workers showed a slight decline during the same period.

On the other hand, in industries where remote work is not possible, the relative unemployment of young people was found to have returned to its original level after rising slightly in 2020. There was almost no gap in unemployment rates between youth and non-youth.

Based on this study, the research team analyzed that the spread of remote work could explain about 64% of the total increase in youth unemployment rate between 2017-2019 and 2022-2024.

The research team explains that in workplaces where remote work is common, companies may be reluctant to hire inexperienced employees because it makes it difficult for managers to train and mentor new employees.

Regarding the claim that AI development had an impact on increasing youth unemployment, the research team diagnosed that “the rise in youth unemployment occurred before the rapid spread of AI.”

However, it was determined that “generative AI and other factors may play a more important role in determining the employment patterns of young people in the future.”