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Pay prospects of graduates being damaged by unpaid internships

Authored by Phil Meekin

Phil Meekin

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Approximate read time: 3 minutes

New findings from the Institute for Social and Economic Research at the University of Essex has found that almost every graduate who has taken an unpaid internship can expect to be worse off than if they had just gone straight into work. As unpaid internships are already a subject which causes plenty of discussion, as to whether they should be used or not, this research is only likely to fuel the debate.

This survey looked into the career trajectories of tens of thousands of students over a six year period and revealed that three and a half years after graduating, those who had been interns faced a salary penalty of around £3,500 compared to those who went straight into paid work and £1,500 compared to those who went on to study further.

Of those that took up an unpaid internship, those who were privately schooled or had parents in professional occupations were around £2,000 a year worse off whereas those from more disadvantaged backgrounds were around £4000 worse off than their peers.

This difference in earnings for those who took up an internship points to the differences in education and financial situation; it is thought that those from advantaged backgrounds had the opportunity to go after sought-after apprenticeships whereas those from disadvantaged backgrounds were forced into a situation of taking unpaid work due to limited work opportunities.

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One thing this study points to is that an internship does not mean an instant jump onto a successful career as many people think. Internships have long been sold as the way to build experience, connections and push yourself further up the career ladder but this may not be the case for a significant majority of past interns.

Dr Angus Holford, who carried out the study, commented on his findings to say; “I expect some people will find an internship that enables them to do the job they really want to do and that will have the big labour-market return but, on average, an internship you take won’t lead directly to a job in the profession you really wanted or the profession you did the internship in.”

Further worrying news for past, present or future interns is that they were less likely to go on to professional/managerial roles or be satisfied with their career. When those who took an internship were compared to those who went onto further study, interns were 15% less likely to achieve a professional/managerial role and 8.8% less likely to be satisfied with their career.

However, Dr Holford suggested that the earning disparity could be as a result of an internship letting a graduate test the waters of a certain job and acting as a delay to the start of a graduate’s official career. Around 38% of graduates who took on an internship said that they did it as an experiment to see if they would like the type of work on offer.

As many change career or sector after their internship and with being at least 6 months to a year behind their peers, it is no wonder that the earnings of those who opted for an internship are less three years on from graduation.

So while internships can be beneficial because of the experience you gain and the connections you make, graduates may now think a little harder about the benefits of an unpaid internship on the future of their career.

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