Young People's Job Market Struggles Have Nothing to Do with AI—Yet

Summary

While unemployment rates for recent college graduates have surged to their highest levels in over a decade since ChatGPT's release in late 2022, new analysis suggests AI is not responsible for the decline. Economists Adam Ozimek and Nathan Goldschlag found that the apparent deterioration in the graduate job market is largely a statistical artifact—unemployment measurements exclude young workers without degrees who have stopped job hunting, artificially inflating the relative performance of college graduates. When using broader employment metrics that include all working-age adults under 25, young people across all education levels show signs of economic stress, contradicting the narrative that AI specifically targets entry-level white-collar positions.

The underlying cause appears to be a longer-term structural shift in the labor market predating AI entirely. Since 2008, the percentage of young people earning bachelor's degrees has risen by approximately one-third, primarily through enrollment expansion at less selective universities. This simultaneous increase in graduate supply and decrease in average graduate skill level mirrors what happened with high school diplomas 50-60 years ago, when widespread credential attainment eroded the employment advantage once conferred by such qualifications. Experts suggest the shrinking premium for recent graduates reflects basic supply-and-demand dynamics rather than technological disruption.

• Current youth labor-market weakness reflects structural economic changes in educational attainment and job market composition, not technological disruption