Remote Work’s Unintended Impact on the Next Generation of Talent

Remote work became a permanent feature of many professional occupations after the pandemic. During the same period, unemployment among young college graduates rose while employment prospects for experienced college-educated workers remained largely unchanged.

Research from the New York Fed finds that these trends may be connected.

The analysis suggests that remote work can limit opportunities for training, mentorship, and feedback that help new graduates develop skills early in their careers. Employers may therefore be more likely to hire experienced workers for distributed teams and more hesitant to bring on employees who require greater on-the-job development.

Why It Matters: The study examines how remote work affects the hiring and development of early-career talent. Its findings suggest that workplace structure can shape the flow of new talent into knowledge-based occupations and influence how future expertise is developed within organizations.

• Youth Unemployment Outpaces Experienced Workers: Unemployment among college graduates under age 29 increased from 3.1% in 2017–2019 to 3.7% in 2022–2025. Among older college graduates, unemployment fell slightly from 1.9% to 1.8%. The difference is significant because entering the workforce during a weaker job market can affect earnings and career progression for years.

• The Gap Is Concentrated in Remote-Friendly Jobs: Comparing remotable occupations such as software engineering with occupations that require physical presence, the researchers found that most of the widening unemployment gap between younger and older workers occurred in remotable jobs. In occupations that require on-site work, unemployment patterns largely returned to pre-pandemic levels after 2020.

• Remote Work Explains Much of the Increase: The authors estimate that remote work explains roughly 64% of the rise in unemployment among young college graduates between the pre-pandemic and post-pandemic periods. Because many graduates pursue careers in remotable occupations, hiring decisions within those fields have a substantial effect on early-career employment.

• The Data Challenges the AI Narrative: Unemployment among young graduates began rising before generative AI became widely adopted. The gap between younger and older workers also remains after accounting for occupations’ exposure to AI. The study identifies remote work as a more significant factor in current employment trends.

• Why Distributed Teams Favor Experienced Hires: Using data from a Fortune 500 company, the researchers found that employees working near colleagues received more feedback and mentorship, with younger workers benefiting most. Workers who spent more time alongside teammates later produced higher-quality work. During pandemic office closures, the company hired fewer inexperienced workers and more experienced workers. After offices reopened, hiring of younger workers returned, while distributed teams continued to favor experienced candidates.

Go Deeper -> Remote Work Leaves Younger Workers Sidelined – Liberty Street Economics