The Early Impacts of AI on Employment Among Recent College Graduates

Robert Fairlie and Jane Wu

No 12994, CESifo Working Paper Series from CESifo

Abstract: The impact of AI on the employment prospects of recent college graduates is hotly debated with no consensus on the magnitude of impacts nor even the timing of those potential impacts. Using CPS microdata, we provide the first estimates of the effects of AI on the unemployment of recent college graduates in June, July and August 2026. We provide evidence suggesting that unemployment rates are especially high for summer months and that 2026 might be the first year of widespread enough AI use in the workplace to detect impacts of AI on recent college graduates, the group argued to be most vulnerable to AI replacement. Taking an agnostic approach to defining treatment timing, we find that unemployment rates did not spike in summer 2026 relative to summer months in previous years and did not rise in a significant way relative to older college graduates or young workers without a college degree. We also provide the first analysis of an expanded definition of unemployment that includes those who report “wanting a job” which adds nearly two percentage points to the unemployment rate of recent college graduates but we find no evidence of a statistically significant increase in summer 2026 even after adding these “sidelined unemployed.” We estimate difference-in-differences and event-study interaction models using both older college graduates and young non-college graduates as comparison groups and do not find evidence of an increase in relative unemployment rates. Finally, we estimate models in which we interact 2026 unemployment with AI exposure and remote work availability by occupation and find some evidence of a positive relationship with remote work availability.

Keywords: AI; technological change; unemployment; job loss; college graduates (search for similar items in EconPapers)
JEL-codes: J21 J24 J63 J64 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-ain and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12994

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