The job market for young people is brutal. Is AI to blame?

ChatGPT was released in late 2022. Since then, the unemployment rate for recent college graduates has shot up to near 6 percent, its highest level in more than a decade, setting aside the 2020 pandemic spike. That’s true even though the overall unemployment rate is about 4 percent.

Many observers have interpreted these data as evidence that AI has begun displacing entry-level white-collar professionals. “AI Is Wrecking an Already Fragile Job Market for College Graduates,” reads a representative Wall Street Journal headline from last year. But the AI-stealing-the-jobs story turns out to be wrong—or at least premature. Almost every data point available suggests that whatever is holding back young people in the job market has nothing to do with AI. Whether that’s good or bad news is a much tougher call.

The case that AI is already stealing young people’s jobs is based on a statistical mirage. Historically, recent college graduates have had a much lower unemployment rate than the average worker. Since ChatGPT was released, however, the unemployment rate for this group has risen nearly twice as fast as the overall number. Because AI is best suited to replacing white-collar workers, this trend is what you’d expect to see if AI was having a labor-market impact.

From the March 2026 issue: America isn’t ready for what AI will do to jobs

But the unemployment rate can be a highly misleading statistic. The Bureau of Labor Statistics counts individuals as “unemployed” only if they’ve actively looked for work in the past four weeks; otherwise, they are removed from the data set. The rationale is to avoid counting people who don’t actually want a job, such as students, retirees, and stay-at-home parents. But it also excludes people who want to work but have stopped looking for a job.

The economists Adam Ozimek and Nathan Goldschlag recently took a deeper look at the data and found that a significant number of young workers without college degrees had simply given up looking for a job, artificially improving the unemployment rate for young workers without a degree and thereby giving the appearance that recent college graduates were doing uniquely poorly. This is the labor-market equivalent of a school’s worst-performing students simply not showing up on standardized-test day.