Key Findings

The unemployment rate for young college graduates rose to 5.6% in March 2026, up from 3.6% in March 2019.

According to New York Fed economists, remote work accounts for 64% of this increase. Employers may hesitate to hire fresh graduates for distributed teams due to difficulties in providing on-the-job training remotely.

Comparison with AI Impact

The researchers state that while artificial intelligence's effect on entry-level jobs has received significant attention, the expansion of remote work likely has had a greater impact on youth unemployment.

Methodology

The New York Fed compared unemployment rates between inexperienced and more experienced employees in:

• "Remotable" jobs (e.g., software engineers, financial analysts)
• "Non-remotable" jobs (e.g., funeral home managers, nurses)

They also used proprietary data from an undisclosed Fortune 500 company.

Worker Preferences

A Gallup survey from May 2025 found that only 6% of Gen Z workers prefer fully on-site work. The vast majority—71%—prefer a hybrid arrangement.

Productivity and Hiring

According to 2024 research by the U.S. Department of Labor, industries with higher rates of remote work showed larger productivity increases. However, companies may be hesitant to hire inexperienced workers when they are not in the office.

The researchers wrote: "Remote work has weakened incentives to hire young workers by impeding on-the-job training."