Controlling for remote work eliminates AI's negative hiring effect.
Séb Krier#667
Is GenAI causing the relative decline in early-career hiring? Our latest research finds that these effects may be conflated with another important driver: the rise of WFH arrangements (1/N)
Many users praise studies showing remote work drives junior hiring declines more than AI for offering solid pushback against overhyped job-loss claims, while some dismiss the findings as flawed or absurd.
No Digg Deeper questions have been answered for this story yet.
A major talking point for those who think AI will cause mass unemployment is the recent slowdown in junior-level hiring. Lambert and Schindler, in this new working paper, point to a different culprit: work from home policies.
Using data on ~250 million hires across four countries,they show that AI exposure strongly correlates with a role being work from home. So you have to disentangle the two to get a clean estimate.
Which is the driving variable? They find that the effect of exposure to AI on junior hiring ~vanishes when you control for WFH, whereas the effect of WFH remains ~unchanged when you control for AI exposure.
In other words: it's WFH, not AI, that is slowing junior hiring.
Why? Their theory: "WFH makes supervision, monitoring, and on-the-job learning harder, all of which hit junior-workers more. Firms less willing to invest in junior talent when these frictions rise."
I think that makes sense. WFH involves a certain degree of trust and makes management harder. If an employee is less experienced, all else equal you're less likely to prefer them for a WFH position.
Bigger takeaway, though: if AI is going to take all our jobs, it's sure not there in the data yet!
Is GenAI causing the relative decline in early-career hiring? Our latest research finds that these effects may be conflated with another important driver: the rise of WFH arrangements (1/N)
Another aspect of this is the reality that "manager only" when remote becomes even less interesting to a company since so much of the sideways management/coordination to peers and serendipity management (aka walk the hallways) to those being managed fell away with WFH.
A major talking point for those who think AI will cause mass unemployment is the recent slowdown in junior-level hiring. Lambert and Schindler, in this new working paper, point to a different culprit: work from home policies.
Using data on ~250 million hires across four countries,they show that AI exposure strongly correlates with a role being work from home. So you have to disentangle the two to get a clean estimate.
Which is the driving variable? They find that the effect of exposure to AI on junior hiring ~vanishes when you control for WFH, whereas the effect of WFH remains ~unchanged when you control for AI exposure.
In other words: it's WFH, not AI, that is slowing junior hiring.
Why? Their theory: "WFH makes supervision, monitoring, and on-the-job learning harder, all of which hit junior-workers more. Firms less willing to invest in junior talent when these frictions rise."
I think that makes sense. WFH involves a certain degree of trust and makes management harder. If an employee is less experienced, all else equal you're less likely to prefer them for a WFH position.
Bigger takeaway, though: if AI is going to take all our jobs, it's sure not there in the data yet!
@ymschindler @LSEnews @cage_warwick @CEP_LSE Paper can be found here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6787638
But why WFH? We also propose a stylised model to explain the mechanism: WFH makes supervision, monitoring, and on-the-job learning harder, all of which hit junior-workers more. Firms less willing to invest in junior talent when these frictions rise.
@pj_lambert @pmarca The 'Broken Ladder' is the perfect title. When a company goes full WFH, they optimize for self-sufficient senior talent because the overhead of remote junior mentorship is too high. GenAI just magnified an existing structural shift in how teams operate remotely.
@CharlesFLehman If a job can be done from.home, it can be done in India for 1/10the the cost.
We hope this adds a new dimension to the important conversation about the fall in junior-hiring, perhaps some good news relative to the AI-jobpocalypse story - org. frictions from WFH feel much more manageable than technology-induced displacement.
@MereSophistry @pj_lambert Hi John,
Paper can be downloaded here:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6787638
@pj_lambert @pmarca I wonder if more people stay in the workforce (moms with young kids etc) given WFH arrangements resulting in less open seats for new grads. 🤔
In the paper, we do a whole bunch of extensions and robustness exercises. For example, we find that even a dummy variable capturing WFH is enough to render our main GenAI effect insignificant.
BUT when we control for WFH exposure, this effect all but disappears in our baseline results. This is NOT the case with WFH exposure, which is a robust predictor of the fall in junior-share of hiring with or without AI
that makes sense. been WFH since march 2020 relatively successfully, yet I think back to when I started working in october 2018 and somehow I think just having those 18 months in the office gave me a huge leg up early on relative to someone trying to start out WFH.
like I played foosball with some guy from the office for a while who later became my manager, my favorite manager actually. no way to develop those type of interpersonal bonds when you are WFH.
This has been shown to be concentrated in routine-cognitive white collar occupations. The challenge we highlight is that GenAI exposure is super strongly correlated with WFH exposure, posing a challenge for empirical analysis.
We show that the effect of GenAI exposure is strong before accounting for WFH, using two different outcomes at firm-, region-, and occupation-levels.
@CharlesFLehman Work From Home was growing in our company over the last 10-15 years, but mostly for top people, especially leadership and marketing. After nearly 40 years in the office I was allowed to WFH because of my wife's health. But this month memo went out - no WFH for new hires.
@pj_lambert Fantastic work!
@CharlesFLehman Correlation != causation
Weaker companies offer work from home. Stronger companies can enforce RTO
Can you control for profitability and market cap?
The decline, which has been widely documented, has seen a large fall in the share of new hires going to early-career / junior workers. We find a near 10pp decline in junior-share of new hires in US, UK, Canada, Australia
Reasoning models first made an impact in November 2025.
GPT 5.5 crossed a threshold and became better than most contributors in most product development teams in April 2026.
Reseach focusing on the hiring practices of any organisation prior to these dates will struggle to meet the objectives of the authors.
@pj_lambert can you share the link? I went to your google scholar but couldn't find it.
