Ai's impact on new graduates: contradictory findings emerge

A recent working paper by economists Robert Fairlie and Jane Wu from CESifo challenges earlier concerns about AI displacing recent college graduates. The study, titled 'The Early Impacts of AI on Employment Among Recent College Graduates,' argues there is no significant evidence of widespread hiring reductions in AI-impacted fields. This contradicts a Stanford University study from last month, which found entry-level employment in AI-impacted occupations lagging behind other fields. The CESifo researchers focused on recent graduates, believing labor demand changes may first manifest through reduced hiring. They suggest firms may cut new hires for simpler roles rather than laying off experienced workers as AI becomes capable of performing standardized tasks. The researchers also note a recent rise in firms replacing employee tasks with AI, as per a Census survey, alongside increased AI spending and ChatGPT Enterprise token usage in the past year. The study highlights potential risks for 2026 graduates, citing a sharp increase in AI adoption. However, current unemployment data suggests otherwise, indicating no significant displacement or reduction in hiring for recent graduates. The findings underscore the complex and evolving impact of AI on the labor market, with contrasting perspectives emerging from different studies.