The rise of remote work since the pandemic has made businesses more reluctant to hire young, inexperienced workers and is the key driver of higher unemployment rates for recent college graduates, a study released Monday has found.
The study, by the Federal Reserve Bank of New York, compared occupations that can be done remotely — such as software development — with those that are done in person, such as nursing. The study finds that the unemployment rate among young college graduates in “remotable” jobs rose by about 1 percentage point from 2017-2019 to 2022-2024.
Yet for older workers in those fields — those aged 29 and over — the jobless rate declined slightly, leading to a notably higher unemployment rate for college graduates 28 or younger in remotable occupations compared with older ones.
Yet in non-remotable jobs, there has been little gap in the unemployment rates between older and younger college grads, the study finds. A similar pattern exists for those without college degrees, the study found.
The study concludes that businesses are reluctant to hire new college grads into remote work because it is harder to train and mentor them if they work outside of the office. The authors of the study calculate that remote work is responsible for nearly two-thirds of the rise in the unemployment rate for young college graduates since the pandemic.
“Remote work has weakened incentives to hire young workers by impeding on-the-job training,” the study said. “Employers may not want to hire fresh graduates onto distributed teams because it is more difficult to teach them the requisite skills from afar.”