A study published by the New York Federal Reserve Bank on June 1 reveals that remote work accounts for about 64% of the rise in unemployment among college-educated workers under 29 since before the COVID-19 pandemic [1, 2, 3]. The unemployment rate for this group increased from 3.6% in March 2019 to 5.6% in March 2026 [2].
The study compared unemployment trends between younger and older workers holding "remotable" jobs such as software engineering and "non-remotable" jobs like mechanical engineering. Researchers found that disparities in unemployment rates only persist among the remote-capable occupations [1, 2, 3]. This suggests that the shift to remote work has disproportionately affected young workers’ job prospects.
New York Fed researchers said employers are more cautious about hiring young employees into remote roles due to challenges in training and career development at a distance. "Employers may not want to hire fresh graduates onto distributed teams because it is more difficult to teach them the requisite skills from afar," they noted [2]. They added, "Remote work has weakened incentives to hire young workers by impeding on-the-job training." The researchers also expressed concern that "the high unemployment rates of young college graduates are particularly concerning because early-career experiences can have lasting consequences" [2].
Data from a Gallup survey in May 2025 showed only 6% of Generation Z workers preferred fully on-site work, while 71% favored hybrid arrangements that combine remote and in-person days [2]. Despite young workers' preference for some remote work, employers have reportedly hired fewer inexperienced workers during the pandemic due to difficulties with remote training and mentorship, as illustrated by a Fortune 500 company example cited in the study [2].
While generative AI and other technological changes may impact youth employment in the future, the New York Fed says current data points to remote work expansion as the primary factor driving recent increases in youth unemployment [1, 3].
The study marks a step in quantifying the labor market impact of remote work on younger college graduates and highlights the challenges employers face integrating inexperienced workers into distributed teams. The next data update on youth unemployment is expected with the April 2027 labor statistics release.
