AI is largely responsible for graduates’ employment prospects, and there could be a career advantage behind it all.

Remote work could explain about two-thirds of the rise in unemployment
Young graduates need more in-person time to learn and acquire vital skills
AI impacts could continue to be felt as entry-level roles disappear

New data has revealed that artificial intelligence alone may not be responsible for rising youth unemployment. While that may explain some job losses, the Federal Reserve Bank of New York said hybrid work could also be the cause.

According to the data, remote work could explain about two-thirds (64%) of the increase in unemployment among college graduates.

It appears that unemployment actually started to rise after the pandemic, before the AI boom.

Is remote work responsible for the rise in unemployment?

Between 2017 and 2022, data shows that unemployment among college graduates under the age of 29 increased from 3.1% to 3.7%, an increase of 20%. While older workers haven’t quite seen the same trend, younger workers have been more likely, with New York Fed data revealing that college graduates aged 22 to 27 saw their unemployment rate rise from 3.6% in 2019 to 5.6% in 2026.

And it could all be due to the need to work in person: Entry-level workers typically need frequent feedback, on-the-job coaching, and mentoring opportunities, which are typically stronger in office environments.

As a result, employers may be more likely to employ already experienced workers, instead of having to balance training new graduates in hybrid work environments.

The findings suggest that return-to-office mandates might actually be driven by new in-person graduate experiences, rather than the usual productivity benefits that executives like to cite.

That said, AI is not completely immune, with experts also warning that the automation of entry-level roles and administrative tasks could ultimately lead to a shortage of skilled workers in the future. Furthermore, it cannot be ruled out that AI will have a greater impact in the years to come.

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