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Young workers have experienced notable employment declines in occupations most exposed to artificial intelligence, according to a new analysis released this week by the Federal Reserve Bank of Dallas.
The study suggests that while AI’s overall impact on the labor market remains limited, its effects on workers ages 22-25 are pronounced in certain job categories.
The Dallas Fed report found that employment for young adults in occupations with high AI exposure has fallen about 13% since 2022, a period that coincides with rapid advancements in generative AI technologies. In contrast, employment levels for less exposed or more experienced workers have been steady or even grown.
Economists noted that the decline appears to be driven more by fewer young people entering these jobs out of the workforce than by layoffs or a drop in job-finding rates among those already employed.
“This pattern suggests that the effect so far reflects changing labor market dynamics rather than widespread displacement,” the report said.
The analysis draws on payroll data from ADP covering 25 million workers and uses an AI exposure score developed by researchers at Stanford University, which measures the relative likelihood that tasks in an occupation could be affected by AI. Occupations with the highest exposure include roles such as first-line retail supervisors, administrative assistants and customer service representatives. Occupations with lower exposure include jobs like cashiers, janitors and freight movers.
While young workers in AI-exposed jobs make up just a small share of the total labor force — roughly 9% — the decline in their employment has contributed to shifts in labor patterns. If the decrease translated entirely into unemployment, it would account for only about a 0.1 percentage point increase in the overall unemployment rate since late 2022, the report noted.
The authors cautioned that the relationship between AI exposure and employment is complex and that other factors, such as education levels and broader demographic shifts, may also play a role in observed trends. They emphasized that the impacts of AI could evolve as technology develops and adoption patterns change.
The Dallas Fed’s findings add nuance to a national conversation about how automation and artificial intelligence are reshaping work. While much of the discourse has focused on potential productivity gains and long-term economic growth, the report highlights early evidence that the transition may pose distinct challenges for younger labor market entrants.