47% of recent graduates say AI has already impacted hiring in their field, according to an April survey from ZipRecruiter.

"But is AI really the problem, or is it more complicated?" asks NPR. "Here's what economists have to say."

According to the Federal Reserve Bank of New York, the unemployment rate for recent graduates — which it defines as 22-to-27-year-olds with a new bachelor's degree or higher — was 5.7% as of June, more than the rate for all workers, which stands at 4.1%... Stanford University economist Erik Brynjolfsson says AI is impacting the labor market for entry-level roles. "AI is not the whole story, but it's part of the story and the evidence is building," he says. Using payroll data, Brynjolfsson and his co-authors found that since late 2022 — when large language models like ChatGPT started popping up — early-career workers ages 22 to 25 in AI-exposed roles, like software developers and marketing managers, have experienced a 16% relative employment decline. In comparison, employment rates for older workers in AI-exposed fields and for all workers in jobs that aren't easily automated — like home health aides, physical therapists and construction workers — remained stable or have grown over that same time period... [Though he also says often when companies pull back on hiring, they cut junior roles first.]

Harvard University economist David Deming isn't convinced that AI is to blame for the challenging early-career job market. "If you look very carefully at the timing, it looks like the decline in junior hiring actually started a bit like six months before ChatGPT was released. And so what that tells me is it's something else," Deming says. "I think it's more like remote work." A recent analysis from the New York Fed found that companies are less likely to hire recent college grads into roles that can be done remotely. As remote jobs increased following the COVID-19 pandemic, so did unemployment among younger college grads, the New York Fed found. The analysis also found that AI didn't explain the rise in unemployment among younger workers and that remote work was more of a driving force... Employers hiring for remote jobs may be less likely to choose an entry-level candidate because it's harder to train them from afar... [And with remote positions, there's many more senior candidates to choose from.]

And here's another thing to consider: University of Chicago economist Anders Humlum says if AI were replacing entry-level jobs, you'd expect to see companies that rely heavily on AI to hire fewer workers. But that's not what the data shows. Humlum points to a study done by the financial accounting firm Ramp and the workforce research company Revelio Labs. The study examined AI spending and employee head count across more than 21,000 U.S. firms, from early 2021 to early 2026. It found that at companies making the largest AI investments, entry-level head count grew by 12% over the two years following AI adoption.

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