Economists point to AI uncertainty and migrant visas as youth job prospects weaken
Unemployment among New Zealanders aged 15 to 19 reached 25.3% in June 2026, according to a New Zealand Institute of Economic Research (NZIER) Insight. That is roughly seven times the 3.5% rate for workers aged 25 and over.
For 20 to 24-year-olds the rate was 12%, more than three times that of the older group.
“Youth unemployment has reached a crisis level without an economy-wide unemployment crisis,” the report’s authors, NZIER economists Sarah Hogan and Daniel Hamill, wrote.
Hiring slowdown hits first jobs hardest
The pressure is clearest in hiring. Between June 2023 and June 2025, the number of 15 to 19-year-olds starting a job with a new employer fell 32.1%, according to Stats NZ data. For workers aged 25 and over, the fall was 22%.
In the year to June 2026, underutilisation, which also counts people in work who want more hours, stood at 53.8% for 15 to 19-year-olds, compared with 13.4% across the workforce.
The share of 20 to 24-year-olds not in employment, education, or training rose from around 13% in 2023 to about 17% in 2026.
Retail, food, and accommodation provides 35% of jobs held by under-25s, and youth employment in the sector has fallen 13% since 2023. More broadly, the authors attribute the slowdown in youth hiring partly to employers holding back during a slow recovery. They also point to uncertainty about artificial intelligence, which leaves firms unsure what skills they will need.
Migrant visa changes under scrutiny
The report also examines the Accredited Employer Work Visa (AEWV). The visa’s median wage threshold was removed in March 2025, so employers can now hire migrants at the minimum wage. Monthly AEWV arrivals rose from 1,103 in December 2024 to 3,195 by January 2026. Between 2022 and 2026, more than 38,000 migrants were employed in the lowest-skill roles.
NZIER said the link between migration and youth unemployment is uncertain, and that a blunt cut to migration would be too costly. Instead, it called for close monitoring of the industries where young people typically find their first jobs, to ensure migrant workers are not “eroding the bottom rung”.
Long-term costs for future borrowers
For mortgage advisers, the findings matter because this group of young people may take longer to build income and savings. The report notes that young people out of work miss early KiwiSaver contributions, which compound over a lifetime.
The stakes are clear in the deposit pipeline. More than 50,000 KiwiSaver members withdrew a combined $2.2 billion to buy first homes in the year to March 2026, according to the Financial Markets Authority, while first-home buyers now account for a record share of property sales, according to Cotality.
The report warns that the current pressures could “leave young New Zealanders out in the cold” in a way an economic recovery may not fix. The authors called for immediate support to help unemployed young people into work, alongside a national workforce strategy.
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