AI was supposed to hit new grads hard. So far, unemployment data says otherwise.
Ars Technica·1 min read
Last month, we shared word of a Stanford University study that found entry-level employment in so-called "AI-impacted" occupations lagging well behind that in other fields. Now, a new working paper from economics researchers at Munich's CESifo finds the opposite, arguing point blank that "there is no evidence of any significant, widespread displacement or reduction in hiring of recent college graduates in absolute or relative levels."
In "The Early Impacts of AI on Employment Among Recent College Graduates," researchers Robert Fairlie and Jane Wu said they decided to focus on recent graduates "because changes in labor demand may first appear through reductions in hiring." As AI gets good enough to at least perform the "relatively standardized tasks" in many entry-level office jobs, they argue, firms could reduce new hiring for simpler roles rather than laying off more experienced long-term employees.
There's some reason to believe 2026's graduating job seekers might be more at risk of AI displacement than those graduating just a year or two prior. The CESifo researchers point to a recent sharp increase in the number of firms "replacing a large number of employee tasks with AI" in a Census survey, as well as broad increases in AI spending per employee and ChatGPT Enterprise token use in the last 12 months.
