Graduate interns earn less after three years than those who shun unpaid work, study finds

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Unpaid internships can damage future earnings, according to a new study.

New research from the University of Essex delivered the surprising finding that, three-and-a-half years after graduating, those who took an unpaid internship earned on average £2,000 less than peers who did not take one.

The survey, carried out by the university‘s Institute for Social and Economic Research, found that former interns earned £3,500 less than those who went directly into paid work and £1,500 less than those who continued their education.

The disparity was starker still among those from disadvantaged backgrounds, who earned £4,000 less than peers who entered the workforce directly after graduating.

The difference in earnings was less pronounced among former interns whose parents worked in a professional occupation or who went to private school. 

Meanwhile, graduates from more privileged backgrounds were – perhaps unsurprisingly – best able to secure “good” work placements.

The study uses the data from the Destination of Leavers from Higher Education survey of graduates from English and Welsh universities between 2005 and 2011.

It studies the effects three years on from taking an unpaid internship within six months after graduating from a first degree.

The research paired each former intern with a “matched” individual, according to demographic characteristics and reported motivations for taking the job or internship they are in. 

Study author Dr Angus Holford commented that it was necessary to provide interns with accurate information about where their work placements would lead.

“We all need to understand the rules of any lottery we are entering,” he wrote.

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