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What Job Statistics Say About the Value of College Internships

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Higher education, in and of itself, dramatically reduces the rate of unemployment and underemployment. Yet, a degree is not a ticket that automatically provides a job. With surplus labor in the market, it is difficult for college students, often with little to no experience, to beat out other experienced job candidates. This research aims to provide insight on what measures can be undertaken during college to help new graduates gain employment to save them from the financial and mental strain of floundering in such a poor job market.

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Brooke Chatterton is a senior economics and business major at Southwestern University, where she is active in Alpha Phi Omega, the student newspaper, The Megaphone, and the Financial Analyst Program. Professor of Economics Dirk Early advised her on this project. Brooke plans to go to law school after graduating.

The Office of Career Services at Southwestern University, a small (1500 students) liberal arts institution in central Texas, offers career and internship development and counseling to the Southwestern student body. Career Services works with students throughout their time at the University to develop life skills necessary for career building. This analysis aims to determine the impact of the resources provided by Southwestern University's Office of Career Services and a number of internships on student employment status and satisfaction with their outcome.

The data is sourced from a post-graduate survey, the internal Career Services logs, and data from the Office of Academic Success and Records. In total, the PGS contained profiles on 867 students. Of the possible outcomes a student can have in the PGS, 400 students obtained full-time employment, 131 obtained part-time employment, 258 were continuing education, 47 were working part-time, data was unavailable on 22 students, and 9 students were classified as other/not seeking. In order to focus on the relationship between employment and under/unemployment, students without information, who were continuing education, or who were other/not seeking were removed from the data set. This created a final sample size of 574.

An ordered probit analysis estimated the effects of a number of variables on three possible employment outcomes -- seeking employment, part-time employment, and full-time employment. Those who reported completing one internship during their time at Southwestern University were 13 percent more likely to find full-time employment over those that did not. In addition, as students participated in more internships, they improved their odds of receiving full-time employment. This may be indicative of the fact that students who complete internships gain valuable career contacts and experience within the industries of their choice. Also, students who completed at least one internship reported higher levels of being very happy with their outcome (35.3 percent vs. 28.9 percent). This may be due to the fact that completing an internship allows the student to try a field of employment to see if it is in their interests before committing to it as an occupation. This may increase overall happiness by allowing interns to find their true career passion before leaving school.

Surprisingly, GPA has a negative impact on employment outcome, though it is insignificant. This may be partially attributed to the deficiency in using data pooled by major, or it could signify that those with high GPAs are not as proactive in laying the foundation for their entry into the labor market due to their focus on school. Taking on one or two internships was significant at the 90 percent level, and three or more internships had the largest magnitude of any of the variables at 0.545 and were significant at the 95 percent level. Looking at the marginal effects, increasing from zero to one internship increases the odds of attaining full-time employment by 9.176 percent, from one to two, 1.197 percent, and from two to three or more, 7.208 percent.

The biggest determinant of Southwestern student happiness afterward was employment status. Those seeking or with part-time employment were more likely to have a negative opinion of their outcome at a 99 percent significance level. Additionally, the magnitude of the coefficients for seeking and part-time (-.674 and -.766) are very large. Shifting from being fully employed to seeking or part-time work corresponds with a 25.913 percent and a 29.190 percent decrease in the probability of being very happy with outcome, respectively.

These results highlight the importance of internship experience during college. While some criticize unpaid internships as disenfranchising to the poor who are often unable to afford the luxury of working without pay, it provides work experience and eases student entry into the labor market. By working with colleges to provide funding for students who might not otherwise be able to partake in such beneficial opportunities, more openings can be created that are mutually beneficial to college students and employers.

The Office of Career Services may be able to aid students by increasing awareness among students of internship opportunities or, more importantly, implementing a program to provide stipends to those who participate in unpaid internships. This would incentivize students to gain internship experience. By increasing the number of internships in which the Southwestern student body partakes, the probability of receiving full-time employment increases. This, indirectly, could make students more satisfied with their outcomes due to the fact that satisfaction is largely determined by employment status.

--Brooke Chatterton

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