The sharp rise in youth unemployment is often blamed on automation driven by Artificial Intelligence (AI). But a new study from the Federal Reserve of New York turns this narrative on its head. Research reveals that 64% of the increase in youth unemployment can be attributed to remote work.
The AI Myth Busted
According to the study, which was led by Natalia Emanuel, a research economist at the New York Fed, AI is not the primary driver of job losses among young people. Instead, Emanuel, along with co-authors Emma Harrington of the University of Virginia and Amy Finkelstein of MIT (who was mentioned in previous research but not this one), point to the shift to remote work as the main culprit.
The researchers used a natural experiment approach, analyzing data from 2007 to 2020 to isolate the impact of remote work on youth employment. They found that the COVID-19 pandemic accelerated the transition to remote work, which disproportionately affected entry-level jobs.
The Remote Work Effect
But what does this mean for young people looking for work? The study suggests that remote work has created a barrier to entry-level jobs, as many employers have adopted remote hiring practices. This has made it harder for young people to gain work experience, build connections, and develop social skills – all of which are essential for career advancement.
The shift to remote work has also widened the skills gap in the labor market, as many entry-level jobs now require remote work capabilities. This has created a catch-22 for young people, who need to acquire these skills to be competitive in the job market, but may not have access to the necessary training or resources.
What this means
In practical terms, this study highlights the need for policymakers and employers to rethink the way they approach remote work. By prioritizing in-person work experiences and providing training and support for young people, we can help level the playing field and create more opportunities for entry-level workers.
