Do Internships Pay Off? The Effects of Student Internships on Earnings

The Impact of Internship Experience on Schooling and Labour Market Outcomes

“…First, we differentiate between vacancies for graduates with a humanities and social sciences degree and those for graduates with an exact science degree. Earlier research by Margaryan et al (2020) found the effect of internships during studies on wages to be more pronounced for graduates with humanities and social sciences degrees. This is consistent with the often-reported oversupply of graduates with humanities and social sciences degrees, making internships an important factor to distinguish oneself on the labour market.…”

“…However, this pattern is different when confined to those studies that account for non-random selection in internships by relying on (quasi-)experimental methods. Apart from the correspondence experiment study by Nunley et al (2016), five articles use matching techniques (Gault, Leach, and Duey 2010;Klein and Weiss 2011;Weiss, Klein, and Grauenhorst 2014), or an instrumental variable approach Margaryan et al 2020). Out of these five studies, two do not find a clear positive effect of internship experience during studies on labour market success after graduation.…”

“…This argument is consistent with the matching theory framework (Jovanovic 1979), which states that match quality is an experience good. Fourth, in line with models of on-the-job screening (Stiglitz 1975), also employers may use internships as a probationary period (Morrow 1995;Divine et al 2007): by being evaluated and cultivated as potential future employees, internships may thus serve as a stepping stone to a regular job with the same firm (Margaryan et al 2020). Finally, social network theory (Granovetter 1973) argues that students with internship experience have an enlarged professional network and are more aware of potential labour market opportunities, which in turn could improve hiring chances with other employers (Gault et al 2000;Zopiatis 2007).…”

“…Over the past decades, there has been a growing interest in internships, both by students looking for an internship and by universities or schools integrating them in their curricula or promoting them as extracurricular activities (Margaryan, Saniter, Schumann, and Siedler 2020)). To illustrate this, while the number of US university graduates with internship experience was lower than 3% in 1980, this had increased to around 75% by 2000 (Cook, Parker, and Pettijohn 2004).…”

Did the Bologna Process Challenge the German Apprenticeship System? Evidence from a Natural Experiment

“…Research and Science Studies (DZHW), 62% of all BA graduates from universities and 76% of all BA graduates from universities of applied sciences had to complete at least one compulsory internship during their studies (Fabian et al, 2016). In contrast, of the 2001, 2005 and 2009 graduation cohorts, only 48% of all former graduates completed a mandatory internship according to Margaryan et al (2020). Hence, university education became more oriented towards labor market needs than before, which holds in particular for those universities where practical application was not stressed to the same extent as at universities of applied sciences (Witte et al, 2008).…”