David Deming

New pod: Something very strange is happening to the labor market for college graduates. Their unemployment is rising much faster than the overall economy—in a way that's unprecedented in the last 40 yrs. And it's not just that. MBA graduates are having a harder and harder time finding work. Law school applications are surging—an ominous sign of labor market weakness, for those who remember 2007. So, what's going on? Harvard economist @ProfDavidDeming and I talk thru the evidence. 1. Maybe we're seeing normal labor-market weakening, in a period of high economic uncertainty. 2. Maybe we're seeing a continuation of the post-2010 flatlining (and mild deterioration) of the college wage premium. 3. Maybe we're seeing white-collar companies pinch pennies by hiring fewer college grads and using Generative AI to make up the difference. open.spotify.com/episode/3Fehyr…

New essay: Something strange—and possibly worrying—is happening to the job market for college grads: unemployment for recent grads is rising, while law school applications are surging. Maybe it's a sign of Trumpy chaos. Maybe it's a sign of something more structural. So, here's question I'm mildly obsessed with: What economic indicator should we watch closely to know if AI is starting to really change the whole macroeconomy? "When you think from first principles about what generative AI can do, and what jobs it can replace, it’s the kind of things that young college grads have done” in white-collar firms, @ProfDavidDeming told me. “They read and synthesize information and data. They produce reports and presentations.” I agree. I'm not catastrophic about the risk of total disemployment by machines. But I do think Gen-AI is amazing at the precise skillset of paralegals and young i-bankers, consultants, researchers, and coders. So I've been wondering when we'll see recent grad unemployment peel away from the rest of the economy. Well, that's precisely what's happening now. The unemployment rate for recent grads is worse now relative to the overall economy than any time in the last four decades, at least. Is this slam-dunk evidence of AI disruption? As I say in the piece: nope. But it's ... something to watch.

Join us next Thursday 11/21 when @ProfDavidDeming of @Kennedy_School stops by the Lab to talk about the possible labor market impacts of AI. As always, our seminars are free, virtual, and open to everyone. digitaleconomy.stanford.edu/event/david-de…