Gen Z graduates have faced a difficult path to landing full-time roles out of college. The entry-level job market has been challenging, with limited opportunities and the threat that AI tools will automate their roles.
Instead of facing the bleak job market head-on, law school and MBA programs buy more time to figure out what’s next while safeguarding themselves against the technology.
The numbers show just how anxious recent grads are. The current pool of applicants to American Bar Association-accredited law schools is 33% larger than it was this time last year, according to data from the Law School Admission Council.
In addition, applications to graduate management education (GME) programs (MBAs and other business master’s degrees) continued to rise in 2025, building on last year’s 12% growth with another 7 percent increase, according to a survey by GMAC. The shift comes as unemployment among recent college graduates was over 5% in August, outpacing the national unemployment rate of 4%.
Panic about applying to higher education amid economic anxiety is not a new phenomenon. From the 2008 financial crisis to COVID-19 lockdowns, demand for higher education typically comes as a strategic move to shield against economic downturns ahead, such as a recession.
That’s exactly what the younger generation feels it is, the latest “recession indicator.” Whether or not that caution signals a downturn or if people feel worse about the economy, will unravel over time.
“A recession typically brings rising unemployment, hiring freezes, and reduced economic activity. These disruptions often compel professionals to reassess their career trajectories. Rather than competing in a contracting job market, many opt to return to school to upskill, pivot careers, or simply wait out the downturn,” wrote MBA and Beyond, an admissions consulting firm.
“I know a recession is coming because one of my best friends who is a real estate agent told me he wants to apply to law school,” one user posted on TikTok.
The white-collar freeze
Even as graduates try to safeguard their futures through advanced degrees, the outlook for white-collar work is growing dimmer.
Firms that hire candidates from MBA programs are reducing their headcounts, and workers in financial activities or professional and business services are experiencing slower hiring. Even as eager graduates brace for the impact of AI on these roles, the market has become increasingly competitive.
In addition, those working in professional and business services, the finance industry, and education have not seen wage gains that keep up with inflation. On the flip side, wage growth in leisure and hospitality is outpacing white-collar jobs, flipping the script on where young workers can find earning momentum.
Lawyers are also starting to see automation enter the workplace for junior positions. Though the impact on employment will reveal itself over time, junior lawyers are already learning to adapt to these tools.
Did you apply to law school during an economic downturn—like the 2008 financial crisis? Where did it lead you? Fortune wants to hear from you. Email jessica.coacci@fortune.com.
