CESifo study finds no evidence of AI-driven drop in grad hiring

A new working paper from economics researchers at Munich's CESifo concludes that there is no evidence of significant, widespread displacement or reduction in hiring for recent college graduates. The findings contradict a recent Stanford study, which reported that entry-level employment in AI-impacted occupations was lagging behind other fields. In the paper, titled "The Early Impacts of AI on Employment Among Recent College Graduates," researchers Robert Fairlie and Jane Wu state that they focused on recent graduates because changes in labor demand may first appear through reductions in hiring rather than layoffs of existing staff. The authors argue that as artificial intelligence becomes capable of performing relatively standardized tasks in entry-level office jobs, firms may choose to reduce new hiring for simpler roles instead of cutting more experienced, long-term employees. The CESifo researchers suggest that 2026 graduating job seekers may face a higher risk of AI displacement than those who graduated one or two years earlier. This potential shift is attributed to a recent sharp increase in firms replacing large numbers of employee tasks with AI, according to a Census survey. The paper also cites broad increases in AI spending per employee and ChatGPT Enterprise token usage over the last 12 months as indicators of this trend.