Key Findings

  • Researchers at the Federal Reserve Bank of St. Louis point out that the overall decline in job openings, combined with the rising demand for AI-related skills, is leading to a continued deterioration in employment opportunities for young adults aged 18 to 24.Employment opportunities continue to worsen。
  • Researchers William Rodgers III and Alice Kassens stated in a report released on June 30 that from April 2023 (when the U.S. labor market was at its strongest) to December 2025, the employment rate for people aged 18 to 24 fell by more than two percentage points. This decline was mainly reflected in a rise in the unemployment rate, rather than labor force withdrawal. The authors noted that this indicates "young workers are still looking for jobs, but fewer opportunities are available."
  • In contrast, the researchers said, employment outcomes for workers aged 25 to 64 remained largely stable, without a decline of similar magnitude.

Deeper Analysis

Rodgers and Kassens noted that the shrinking employment opportunities for young workers is consistent with an economic pattern of "low hiring, low layoffs," where businesses tend to retain existing employees but scale back new hiring.

The two economists wrote that the impact of AI exists but is "narrow, early-stage, and age-specific." The technology "raises the bar for young workers trying to gain a first foothold in the labor market, an area where employers are less inclined to post job ads, extend offers, or make hires." They estimate that about one-third of the rise in the unemployment rate for workers aged 18 to 24 can be attributed to the growing demand for AI-related skills.

To conduct this research, Rodgers and Kassens analyzed labor force participation data from the Current Population Survey, which is conducted jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics. To capture overall labor demand, they also examined data from the Job Openings and Labor Turnover Survey published by the Bureau of Labor Statistics.

The two economists also analyzed detailed job posting data to gauge demand for AI positions. They classified job postings requiring any skill from clusters such as generative AI, machine learning, or neural networks as AI positions. The data reflects changes in job content (the skills and tasks listed in postings), and Rodgers and Kassens clarified that this "does not indicate whether companies are using AI to automate jobs or screen applicants."

A 2025 Stanford University study shows that since OpenAI launched ChatGPT at the end of 2022 and generative AI became widely used, in fields such as software engineering and customer service—areas with the highest AI exposure—the employment rate of early-career workers has declined significantly.

Researchers at the Federal Reserve Bank of New York found thatremote workmay also be a contributing factor, especially for recent college graduates. According to their analysis, in jobs that can be performed remotely, the unemployment rate for young workers rose by one percentage point, while for older workers in such positions, it declined slightly.

However, the researchers also found that in occupations that cannot be performed remotely, young workers fared relatively better. The hiring patterns of a Fortune 500 company suggest that the firm "is willing to develop junior employees when there is close proximity, but tends to avoid hiring inexperienced workers when distance poses a barrier to training and development," the researchers said.