Sep 11, 2017 at 12:00am ET By Joanna Hughes

The benefits of internships have long been widely lauded. However, now comes news that unpaid internships may do more harm than good -- at least when it comes to earning potential. Here’s a closer look at the findings, according to a recent working paper from the Institute for Social and Economic Research (ISER).

More Work, Less Pay?

Author Angus Holford used the Destination of Leavers from Higher Education Survey (DLHE) to examine the impact of unpaid internships on English and Welsh graduates upon completion of their first degrees as well as three years afterward.

The study’s conclusion? “We show a significant salary penalty at 3.5 years after graduation compared with those going straight into paid work or further study, but also that graduates from higher socio-economic status have an advantage in accessing internships while being significantly insulated from their negative effects.”

In other words, not only can internships hurt your income, but this phenomenon is more likely to impact students from disadvantaged groups, who were often offered “less desirable or potential exploitative positions.”

The Competition Conundrum

According to Holford, the difference may be attributable to fierce competition in in-demand sectors. He told The Guardian, “There’s lot of jobs, for example in the arts or charities or non-governmental organisations, that people will willingly take a pay cut for the privilege of working in. People want to work for them because they’re doing good deeds. So as a result they’ve got many more people applying to work for them. If these are the jobs that people end up working in after an internship, then it’s not such a surprise if the wages are lower.”

Meanwhile, students from more privileged backgrounds are more likely to be offered good internships which promise higher salaries in the future.

There is an upside, however: While money matters, it’s not everything. The working paper also indicates that while students who did unpaid internships did make less money, they were also more likely to report being “very satisfied” with their eventual careers.

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Joanna worked in higher education administration for many years at a leading research institution before becoming a full-time freelance writer. She lives in the beautiful White Mountains region of New Hampshire with her family.

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