Remote Work Linked to Rising Youth Unemployment, NY Fed Research Suggests
Quick Look
- New York Fed research indicates remote work accounts for 64% of the rise in youth unemployment since the pandemic, as employers find it harder to train new graduates remotely.
- This trend may have lasting consequences for early-career experiences.
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Why It Matters
New research from the Federal Reserve Bank of New York suggests a link between the rise of remote work and increased youth unemployment since the Covid pandemic. The study estimates that remote work is responsible for 64% of the increase in unemployment among young college graduates.
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Both remote work and youth unemployment are on the rise since the Covid pandemic — and the two trends are related, according to new research by the Federal Reserve Bank of New York.
The unemployment rate for young college graduates swelled to 5.6% in March 2026 from 3.6% in March 2019, the New York Fed economists wrote in a blog post published Monday. They estimate that remote work can account for 64% of the recent increase.
"Employers may not want to hire fresh graduates onto distributed teams because it is more difficult to teach them the requisite skills from afar," the authors said.
While the impact of artificial intelligence on entry-level jobs has received much attention recently, the expansion of remote work has likely had a greater impact on youth unemployment, they wrote.
The New York Fed researchers compared unemployment rates between inexperienced and more experienced employees across "remotable" jobs, such as software engineers and financial analysts, and "non-remotable" jobs, such as funeral home managers and nurses. They also used proprietary data from an undisclosed Fortune 500 company.
Very few Gen Z workers — 6% —prefer fully on-site work, a Gallup survey from May 2025 found. Most, 71%, said they prefer a hybrid arrangement.
Industries with higher rates of remote work showed bigger jumps in productivity, according to 2024 research by the U.S. Department of Labor.
But companies may be hesitant to hire inexperienced workers when they won't be in the office, the New York Fed researchers wrote.
"Remote work has weakened incentives to hire young workers by impeding on-the-job training," they wrote.
'Lasting consequences' for college grads
Those working separately from colleagues may receive less feedback, which can especially hinder the development of those newer to the workforce, the New York Fed authors wrote.
Their research also found that one Fortune 500 company hired fewer inexperienced workers during the pandemic because of the challenges to providing education and mentorship from afar — a dynamic that they said could be playing out more broadly now with widespread remote work.
"The high unemployment rates of young college graduates are particularly concerning because early-career experiences can have lasting consequences," according to the blog post.
Open Questions
- What specific strategies can employers implement to effectively train and mentor new graduates in remote or hybrid environments?
- Will companies reconsider their remote work policies in light of these findings?
- What are the long-term economic implications of this trend for the affected graduates?
- How does the impact of AI compare to remote work on entry-level job markets?
