New York Fed – Liberty Street Economics: “Youth unemployment has risen dramatically since the pandemic—as has the prevalence of remote work. Our analysis suggests that these trends are related, with remote work making it more difficult for managers to train and mentor new employees. Accordingly, companies may be reluctant to hire less-experienced workers in distributed work arrangements. We estimate that remote work can explain 64 percent of the recent increase in unemployment among young college graduates. Further, the timing of this surge suggests that remote work—not generative AI—explains the bulk of the rise in youth unemployment. (Not) Working from Home – Unemployment among young college graduates has risen significantly since the pandemic, a topic much discussed by scholars and the popular press. While unemployment among those under 29 was 3.1 percent on average in 2017-19, it rose by 20 percent to 3.7 percent in 2022-25. The unemployment dynamics for young graduates particularly stand out given that the unemployment rate for more experienced college graduates actually dipped from 1.9 percent in 2017-19 to 1.8 percent in 2022-25. The chart below shows how unemployment evolved for college-educated workers of varying ages. The high unemployment rates of young college graduates are particularly concerning because early-career experiences can have lasting consequences. For example, entering the labor market in a recession can scar a person’s career. Research finds that individuals who began looking for jobs in slacker labor markets tend to have lower earnings and slower career progression relative to comparable peers who began their job search in better market conditions…”