St. Louis Fed Study: Job Shortage, Not AI Skills Gap, Drives Youth Unemployment

A new study from the Federal Reserve Bank of St. Louis concludes that a shortage of job openings, rather than a lack of AI-related skills, is the main driver of rising unemployment among young workers in the US. As Bloomberg reported, the unemployment rate for those aged 18 to 24 rose by 2.9 percentage points due to a shortage of job openings between April 2023 and December of the prior year. By contrast, the effect of companies shifting demand toward AI-related roles and seeking specialized skills accounted for only a 1.1 percentage point increase, less than half of the impact of the openings shortage. The study notes the AI effect remains statistically significant but attributes the primary upward pressure on youth unemployment to the broader shortage of job openings.