Researchers Robert Fairlie and Jane Wu published a paper examining early AI effects on employment for recent college graduates. They argued that hiring cuts would surface before layoffs of seasoned workers because AI can handle many standardized tasks in entry-level office positions. Their analysis centered on graduates aged 22-25 who hold bachelor’s degrees and are not enrolled in further study.
CESifo analysts highlighted a recent surge in firms reporting large-scale substitution of employee duties with AI, alongside rising AI expenditure per worker and increased use of ChatGPT Enterprise tokens over the past year. These trends suggest that the 2026 cohort could face heightened exposure to automation compared with graduates from earlier years.
To test these concerns, the team extracted detailed microdata from the U.S. Census Bureau’s Current Population Survey. They tracked summer unemployment patterns for recent graduates, noting the typical seasonal spike when new entrants flood the labor market. The series began in 2022, the year employment rebounded to pre-pandemic levels and the first ChatGPT model was launched.
The summer 2026 unemployment rate for the target group measured 7.3 percent, falling comfortably within the historical band of 6.3 percent in 2022 to 7.8 percent in 2024. Expanding the definition to include respondents who expressed a desire for work but were not actively job-searching produced similarly modest figures, indicating no marked deviation from prior summers.
The researchers applied statistical comparisons between the recent graduate cohort and two reference groups: non-college peers of the same age and older college graduates aged 30-49. They also stratified outcomes by estimated AI exposure based on a 2023 occupational risk study. Across virtually all specifications, differences in unemployment trends from 2022 through 2026 failed to reach statistical significance.
A recent Stanford analysis reported a starkly different picture, drawing on payroll data supplied by ADP. While ADP’s dataset captures a broad slice of the economy, it emphasizes job supply and may omit nuances captured by the Census survey. Moreover, unemployment rates incorporate both supply and aggregate demand, allowing demand shifts to offset supply contractions that AI might induce in certain occupations.