New study shows paid internships boost first-job salaries by $3,000 and student confidence about their careers

Disparities in securing paid internships persist for women, people of color, first-generation college students, and students with low incomes — even when taking into account their fields of study
March 16, 2022

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For colleges and universities seeking to support their students’ success after graduation, new research shows paid internships are a powerful tool for increasing wages and creating greater confidence about careers. The new study from Strada Education Network, “The Power of Work-Based Learning,” reveals college students who completed a paid internship during their undergraduate education are working in higher-paying jobs a year after graduation — even when accounting for differences in pay based on field of study, gender, and race/ethnicity. However, the study also showed that women, people of color, first-generation college students, and students who struggle to afford their education are far less likely to secure paid internships. 

The study, based on data from three national surveys, points to paid internships as a powerful way for universities, colleges, and employers to work together to improve post-graduation outcomes. Participating in a paid internship as an undergraduate is associated with a predicted increase in annual wages of $3,096 just one year after graduation, even after controlling for differences in pay related to graduates’ gender, race/ethnicity, and field of study.

The predicted payoff is evident only for paid internships, while unpaid internships, cooperative experiences, and practicums are not associated with a statistically significant increase in post-graduation earnings.

The report, authored by Strada researchers Nichole Torpey-Saboe, Elaine W. Leigh, and Dave Clayton, analyzed data from the U.S. Department of Education’s Baccalaureate and Beyond Longitudinal Survey and two nationally representative surveys — the 2021 Strada-Gallup Education Survey and the 2021 Strada-College Pulse Survey – to draw a fuller picture of how to help students succeed beyond completion of their degrees. 

“These findings show how early connections between employers and education institutions have significant benefits in preparing students for success after graduation,” Torpey-Saboe said. “They also reveal that more needs to be done to ensure that all students, especially women, people of color, first-generation, and students with low incomes, can take advantage of paid internships.”

The study also found that paid internships are associated with noneconomic benefits for current students. Among current students, paid internships are linked with greater confidence they will be successful in the job market and a greater likelihood they believe their education will be worth the cost. These students also are more likely to recommend their college or university to others. 

“This research reminds us how real-world experiences can help students learn new skills, build networks, and gain clarity on their future goals,” Clayton said. “The data show that holding internships can increase confidence in career-planning decisions, employability, and career satisfaction.”

While the benefits of work-based learning opportunities are clear, the opportunity to participate in a high-quality work-based learning experience remains relatively rare. According to the U.S. Department of Education’s Baccalaureate and Beyond longitudinal survey, among the graduating class of 2016, only 29 percent of bachelor’s degree recipients held a paid internship, 31 percent held an unpaid internship, 10 percent participated in a cooperative experience, and 15 percent participated in a practicum. 

“The data are clear: Paid internships work. They pay valuable dividends for employers, students, and institutions. We hope to see more paid internship opportunities for more students at all kinds of institutions around the country,” Clayton said. 

More information and a link to the full report can be found here.  

About Strada Education Network

Strada Education Network is a nonprofit organization dedicated to helping people take advantage of education and training after high school that helps them secure a good job, do meaningful work, contribute to their communities, and lead a fulfilling life. We believe education and training after high school have the potential to be the most powerful and equitable ways to help all people thrive in their careers and lives. To help students succeed beyond completion of a certificate or degree, we conduct research, make charitable grants and social impact investments, and support Strada Collaborative, which directly serves students and workers. Learn more at stradaeducation.org.