New York Fed links remote work, youth job loss

The Federal Reserve Bank of New York published a June 1 research post arguing that remote work is a major factor behind higher unemployment for young college graduates. The post, on the bank’s Liberty Street Economics site, said unemployment among young college graduates has risen since the pandemic alongside a sharp increase in remote work. The authors said the link runs through training and mentoring: managers may be less willing to hire inexperienced workers when teams are distributed. They estimated that remote work can explain 64% of the recent increase in unemployment among young college graduates. ### Where did the 64% figure come from? The June 1 post was written by New York Fed economists Natalia Emanuel, Emma Harrington and Amanda Pallais. Their summary said remote work has made it harder for managers to train and mentor new employees, and that firms may therefore be more reluctant to hire less-experienced workers into distributed teams. The authors said their estimate is that remote work explains 64% of the recent increase in unemployment among young college graduates. (libertystreeteconomics.newyorkfed.org) The New York Fed’s May 28 media advisory previewed the same finding before publication. That advisory said the March 2026 unemployment rate for recent college graduates aged 22 to 27 was 5.6%, up from 3.6% in March 2019, and said the post would examine how much of that increase could be explained by remote work. ### Which workers are the economists talking about? The New York Fed post focused on young college graduates and compared them with more experienced college graduates. (libertystreeteconomics.newyorkfed.org) The authors wrote that unemployment among workers under 29 averaged 3.1% in 2017-19 and rose to 3.7% in 2022-25, while the unemployment rate for more experienced college graduates dipped from 1.9% to 1.8% over the same periods. (newyorkfed.org) The bank’s separate labor-market tracker uses a slightly different cut, defining recent college graduates as ages 22 to 27. That tracker said labor-market conditions remained difficult at the start of 2026, with unemployment at about 5.7% in the first quarter and underemployment at 41.5%. ### How did the researchers connect remote work to unemployment? The economists said they compared unemployment rates in “remotable” occupations, such as software engineering, with “non-remotable” occupations, such as mechanical engineering. (libertystreeteconomics.newyorkfed.org) To do that, they used an index of how easily the tasks in a job can be done remotely, according to the post and the Fed’s media advisory. (newyorkfed.org) The New York Fed also said the post examined firm-level patterns using proprietary data from a Fortune 500 company. In the authors’ account, the mechanism is not that remote work eliminates jobs outright, but that it changes how employers weigh the costs of bringing in junior staff who need on-the-job learning. ### Did the post say AI was the main cause? The June 1 post said the timing of the rise in youth unemployment suggests remote work, not generative AI, explains most of the increase. (libertystreeteconomics.newyorkfed.org) That is narrower than saying AI has no effect at all; the authors’ claim was about what explains the bulk of the recent rise. The May 28 advisory also said the research would address whether generative AI played a role in the uptick. (newyorkfed.org) The published post’s conclusion, as summarized by the bank, was that remote work was the stronger explanation. ### Where can readers check the underlying source? The full write-up is on the New York Fed’s Liberty Street Economics site under the headline “Remote Work Leaves Younger Workers Sidelined,” dated June 1, 2026. (libertystreeteconomics.newyorkfed.org) The authors are Natalia Emanuel, Emma Harrington and Amanda Pallais. The New York Fed’s “Labor Market for Recent College Graduates” page provides the broader series that it updates regularly. (newyorkfed.org) As of first-quarter 2026, that page showed unemployment at about 5.7% for recent college graduates, with the next update dependent on the bank’s published schedule for new data and research releases. (newyorkfed.org) (libertystreeteconomics.newyorkfed.org)