The rise of remote work since the pandemic has contributed significantly to higher unemployment rates among recent college graduates, according to a study released Monday by the Federal Reserve Bank of New York.

The research found that unemployment rates for college graduates aged 28 and younger in jobs that can be performed remotely rose by approximately 1 percentage point from 2017-2019 to 2022-2024. Meanwhile, unemployment rates for workers aged 29 and older in the same remotable occupations actually declined slightly during this period. In contrast, there was little difference in unemployment rates between younger and older college graduates in jobs that must be performed in person.

The study, led by New York Fed research economist Natalia Emanuel, concludes that employers are reluctant to hire new graduates for remote positions because training and mentoring inexperienced workers is more challenging when they work outside the office. The researchers calculate that remote work accounts for nearly two-thirds of the increase in youth unemployment since the pandemic.

Unemployment for college graduates under 29 rose 20% from pre-pandemic levels to 3.7% on average in 2022-2024. For graduates aged 22 through 27 specifically, unemployment reached 5.8% last year, the highest rate outside the pandemic period since 2012.

The study also examined hiring patterns at an unnamed Fortune 500 technology company, which showed similar trends. When the company's offices were closed and staff worked remotely, it hired fewer inexperienced workers and more experienced ones who required less mentorship. After offices reopened, the company returned to hiring more younger workers, though it still favored experienced candidates for teams that included remote work components.

The researchers noted that the rise in youth unemployment predates the development of artificial intelligence tools like ChatGPT, and their analysis found that AI exposure had little impact on unemployment patterns among young workers.