NACE Journal, November 2016

Unpaid internships correlate negatively to student salary and employment outcomes, but are not without value: They correlate to positive outcomes in the areas of confirming or rejecting career interests, setting and attaining career goals, quality of supervision, and networking, according to findings of a new study by the NACE Foundation.

In the world of college career development, it is certainly no secret that unpaid internships are one of the most hotly contested topics among students, employers, and society at large. A quick Google search of the term yields a number of troubling results—articles decrying the systemic unfairness of working without compensation, legal guidelines for employers (such as the U.S. Department of Labor’s Fact Sheet #71), advice for students on evaluating internship opportunities, and, of course, information on class action lawsuits.

On its website, NACE also weighs in on the topic, outlining a clear position statement that aligns closely with the seven standards established by the U.S. Department of Labor in 2010. In particular, NACE emphasizes that students must gain some educational benefit from their experience, even if the employer also benefits from the relationship (differing slightly from the DOL in this regard).¹ Going a step beyond Fact Sheet #71, NACE specifies seven standards that may be used to gauge the legitimacy of internship experiences, such as an opportunity to apply academic training, obtain transferable skills, and receive regular feedback from an experienced professional. NACE also argues that internships must have clearly defined learning goals, defined start and end dates, and sufficient organizational resources to support the achievement of desired student outcomes. Taken together with the U.S. Department of Labor standards, NACE’s position statement helps clarify for employers, students, and the general public what many experienced career development professionals know intuitively: Not all internships are created equally.

For students in particular, the matter is not so clear, perhaps because of the barrage of conflicting information that they are often presented with during this tumultuous period of their development. Parents, colleges, employers, and career services offices are heavily pushing the importance of real-world experience. In conversations with students and campus administrators, we hear this refrain often.

Meanwhile, policy makers and popular media channels present an image of unpaid internships that is at best unbeneficial and at worst exploitative. Books like Ross Perlin’s 2011 Intern Nation offer a harsh critique of the process by which millions of college students connect to the labor market in modern day America. Given these conflicting perspectives, what are students to believe?

From an academic standpoint, there is an equally puzzling lack of empirical information regarding the positive and negative outcomes of unpaid internship participation. A review of scholarly work on the topic primarily yields articles from legal journals, which are focused on the implications of unpaid internships related to employment law. In terms of learning and development outcomes, a wide array of articles over the past few decades confirm the benefits of internship participation more broadly, but mentions of compensation are few and far between (for one example, see Beard & Morton’s “Effects of Internship Predictors on Successful Field Experience”²). A recent study by Intern Bridge titled “The Debate Over Unpaid College Internships” helps quantify which majors (education and social science students) and demographics (women, minorities, and middle-to-low income students) are more likely to participate in unpaid internship experiences.³ NACE also offers data on internship participation, reporting that more than 65 percent of students participate in an internship or co-op, more than 60 percent of which are paid.⁴ These statistics illustrate a helpful first step in conceptualizing the issue more fully, but also demonstrate the need for further research. In particular, the growing prevalence of first-destination data for college graduates presents a unique opportunity for additional study of this topic, allowing researchers to better understand connections between student experiences and career outcomes.

To help clarify this issue, I responded to the NACE Foundation’s 2015 call for research proposals on the topic of unpaid internships. For the past year, I have been examining student data from the University of Georgia (UGA) Career Center and conducting a mixed-methods study on the role of unpaid internships in undergraduate career outcomes. This article offers a summary of that research, and poses some questions and recommendations that, hopefully, will help continue to drive this debate moving forward.

The Study

The launching point for the study was a curious statistic that I stumbled across within an existing pool of data in our office. Each year, the UGA Career Center surveys students returning from summer break to assess their work experiences. The response has been favorable, averaging more than 3,000 student participants annually with feedback on part-time jobs and internships. Interestingly, 85 percent of respondents in recent years had reported that their unpaid internships were highly beneficial (either “extremely beneficial” or “very beneficial” to their career development on a 5-point Likert scale).

However, a further analysis of the data somewhat discredited this initial finding. Compared to paid internship participants, unpaid interns were 10 percent less likely to give their experience a top rating (“extremely beneficial”). A combined analysis of internship survey responses and first-destination data reinforced this differential, showing that students completing an unpaid internship the year before graduation were more likely to be still seeking employment six months after receiving their degree.

While this early analysis was helpful in framing the issue, it is of limited use. Our existing internship data are plagued by self-selection issues—students who choose to respond report disproportionately positive experiences—and professional degree programs such as business and journalism are overrepresented in the sample. The survey also only captures a snapshot of the student experience, leaving many unanswered questions as to how the reported experiences fit into the broader context of students’ career development. With around 30 percent of UGA students participating in internships each year reporting that their experiences were unpaid, a significant proportion of the 36,000 students on our campus are taking part in these activities. Given the controversy surrounding this issue, it is vital that we learn more.

Persisting onward with an expanded, mixed-method approach to understanding this issue, I framed my study around the following four research questions:

• Who does unpaid internships, and why?
• Does the method of finding internships impact quality of experience?
• Why do students find their unpaid internships to be useful to their career development? How do their perspectives differ from the perceived benefits identified by paid internship recipients?
• What correlations exist between unpaid internships and career outcomes, particularly in comparison to similar students who complete paid internships or no internships at all?

As will be demonstrated, some of these questions were answered more effectively than others. In particular, questions of “why” are particularly difficult to assess when discussing unpaid internships, as student decision-making about career opportunities is highly contextual. However, all of the key points outlined above were addressed in some form or fashion through the application of the mixed-method approach.

I should also offer a brief note on the theoretical foundation of the study, which was based primarily upon David Kolb’s Theory of Experiential Learning. Kolb states explicitly that “knowledge is created by the transformation of experience” and argues the cumulative integration of life experiences is an important process in human adaptation and development.⁵ From a career standpoint, this means that students move through three key phases—acquisition, specialization, and integration—over the course of their lifetime. As Kolb argues, “Human beings are unique among all living organisms in that their primary adaptive specialization lies not in some particular physical form or skill or fit in an ecological niche, but rather in identification with the process of adaptation itself—in the process of learning.”⁶ In particular, during the developmental period of specialization, humans begin to acquire competencies that will help them succeed in their chosen careers. Active experimentation in real-world settings, followed by reflection, leads to progressively greater levels of abstract conceptualization and more complex experimentation. In short, real-world experiences acquired by students have the potential to unlock doors for further pursuit and integration of classroom learning experiences. Donald Super’s self-concept theory⁷ and Albert Bandura’s theory of self-efficacy⁸ were also considered in the process of designing the study, as these concepts speak to the development of the student’s professional identity and their ability to set and attain career goals, respectively.

Methods

The approach used for this study consisted of a concurrent, mixed-method research design and an initial sample of 12,220 recent graduates from the academic classes of 2013-15 at UGA.⁹ A total of 348 students completed a survey consisting of 66 multiple-choice and open-ended questions, and one-on-one interviews were conducted with an additional six students via phone or webcam. While the survey portion of the study collected data from a diverse range of recent alumni and reflected a variety of college experiences (including internship participation as well as other varied forms of campus engagement), the interviews were conducted with students who had completed both paid and unpaid experiences during their time in college, allowing the participants to contrast their experiences and reflect on the unique impacts of each opportunity.

The survey portion of the study focused on several different aspects of the student experience, including not only reports of participation in paid and unpaid internship activity, but also questions about other elements of their college experience, such as Greek life, community service, leadership, intramural sports, and involvement with general social or professional organizations. Students rated their participation in each activity relevant to their peers, ranging from no participation at all to extreme levels of involvement for each area. Students were also asked to report on their three most beneficial activities during college and categorize whether each activity was a paid internship, unpaid internship, or other type of involvement. For these involvements, ratings were also requested for key developmental outcomes drawn from Kolb, Bandura, and Super. These areas included the activity’s impact on goal setting, professional skill development, networking, academic performance, job-search success, quality supervision, confirming or rejecting a field of interest, and overall benefits to career development. In addition, demographic data were collected for each student as well as general feedback on their post-graduate careers, including overall satisfaction with their first position after college. Survey data were then combined with reported first destination-information^* from the UGA Career Outcomes Survey, providing a more complete picture of the student’s career journey.

While the bulk of the data collected for the study was quantitative, interviews from participants helped bring additional context to the study. Qualitative data informed analyses of the survey data and helped situate the role of paid and unpaid internships within the students’ career narratives. This exercise was also extremely useful from an evaluative standpoint, providing information on classes, faculty members, part-time jobs, and student organizations that the students found to be valuable. Some students cited on-campus experiences that enhanced their internship experiences or provided useful feedback on ways to improve career services at the institution. Although most of the data shared in this article are drawn from the quantitative portion of the study, the value of these conversations should not be understated.

Lastly, it is important to note that this study did include some limitations. The expanded survey painted a more balanced picture of student career development experiences, but self-selection of participants may still have resulted in a final sample that was not wholly representative of the campus population. Positive skewness is also a concern since students were often asked (in both the survey and the interview) to report on their most beneficial experiences. In general, students at UGA exhibit high levels of engagement with on-campus and career development activities, which is a further consideration when generalizing findings to the broader college student population.

Findings: Paid Versus Unpaid Internships

A quantitative analysis of the survey data was conducted using 21 different regression models, beginning with an exploration of which students on campus were pursuing paid and unpaid internship experiences.

Male students and business or agriculture majors were significantly more likely to pursue paid internships^**, while journalism students and students in the College of Family and Consumer Science (including diverse majors such as consumer economics, financial planning, nutrition, human development, and fashion merchandising) proved more likely to pursue unpaid experiences. Students majoring in political science and international affairs were also more likely to report high levels of engagement with unpaid internships. Lower grade point averages were correlated to lower participation rates for both types of internships. In general, these statistics seem to align with earlier findings by Intern Bridge.¹⁰ It should be noted that the logistic regression models for this initial question seemed to do a better job of explaining paid internship participation (with higher R-squared values).

Altogether, students in the survey sample (n=348) reported participating in unpaid internships at higher levels than paid internships.

Models gauging the impact of unpaid internship participation on job-search success showed that unpaid internship participation was negatively correlated to student salary and employment outcomes. One model showed that participants in unpaid internships were 11 percent less likely to report high levels of satisfaction with their first job. Another calculation assessing time-to-hire found unpaid internship participation to be one of the most significant factors among 24 independent variables, exhibiting a strong negative influence on student acceptance of a job offer prior to graduation. Participation in unpaid internships—as well as research activities and study abroad—was correlated to a longer job-search process upon graduation, which helps support the argument that unpaid internship experiences are largely academic exercises. Part-time off-campus work was also correlated to a longer job-search process, while, interestingly, intramural sports participation was correlated to earlier full-time job acceptance. While unpaid internship participation was consistently found to be a negative influence in graduate career outcomes, these examples illustrate the complexity of interpreting student engagement data and the need for further research in this area.

Another portion of the analysis gauged the impact of reported experiences on specific developmental outcomes drawn from the study’s theoretical framework. These models included dependent variables gauging whether experiences helped students confirm or reject career interests, set and attain career goals, develop their network, enhance professional skills, succeed in the job search, experience quality supervision, or better understand academic coursework. Students were also asked whether experiences were beneficial to their overall career development. In total, 645 individual activities were reported in the survey (students were asked to share up to three beneficial experiences). Unpaid internships were correlated to positive outcomes in the areas of confirming or rejecting career interests, setting and attaining career goals, quality of supervision, and networking. In the latter two categories, unpaid internships proved to be slightly more impactful than paid internship experiences (although both were significant). Notably, unpaid internships were rated as being significantly beneficial to gains in understanding academic coursework, while paid internships were not rated as significant in this area.

Likewise, paid internships were rated as significant to professional skill development, while unpaid internships were not significant in this area. Participation in paid and unpaid internships was fairly evenly split within the sample (103 paid, 101 unpaid).

Not only do these results help to demonstrate an empirical distinction in outcomes between paid and unpaid experiences, but the pattern of results demonstrated in the survey data aligns closely with key concepts of the learning process identified by Kolb.¹¹ In describing structural foundations underlying the experiential learning process, Kolb highlights four core concepts of comprehension, apprehension, intention, and extension. Two of these processes appear to be particularly well-represented within the paid/unpaid internship dichotomy: apprehension and extension. These processes are described by Kolb as the “tangible, felt qualities of immediate experience” (apprehension) and “active external manipulation of the external world” (extension).¹² In the former case, unpaid internships represent more experimental, academic activities that offer early opportunities for immersion and socialization in a chosen field. Meanwhile, paid internships—with their enhanced influence on professional skill development—often allow students greater opportunities to manipulate the external environment. Obviously, the divide between these categories is blurred, as many unpaid internships also allow students to apply and grow their skill sets. However, these distinctions are helpful in a general sense for articulating the developmental considerations of the internship process. The learning processes presented here are also borne out in the qualitative interviews, as students discuss the process of conceptualizing a career interest, seeking out an exploratory opportunity, and reflecting on their experience. As career interests develop, students increasingly sought out more meaningful work experiences that allowed them to play a greater role in manipulating their work environment.

Next Steps in Determining True Impacts of Unpaid Internships

As a career development professional, none of the findings from the study proved to be particularly shocking. Most of us working in the field realize intuitively that employers who choose not to pay interns (whether due to resource limitations on their part or qualification/experience limitations on the student’s part) are not likely to convert unpaid interns to full-time employees. However, studying this issue through an empirical lens is helpful in more fully understanding the true impacts of unpaid internship participation, as well as identifying opportunities for further research.

First and foremost, undertaking this study provides an eye-opening look at the need for better data on student experiences. Recent gains in measuring graduate outcomes offer numerous avenues for advances in career development research, and knowledge of student engagement with on-campus activities is also growing exponentially. However, we still know surprisingly little about the off-campus career development experiences that lead to graduate outcomes. Further consideration of this issue is needed to truly understand the role of paid and unpaid internships as well as other nuanced aspects of student career development, as working with incomplete data only offers a partial understanding of the role of these experiences.

One solution to this issue may be to continue expanding the structured integration of internship experiences into the academic curriculum. Data from this study show that approximately half of the internship experiences reported by students were unpaid, and that unpaid internships were significantly tied to enhanced academic performance. Class assignments and other forms of intentional reflection may help support students in fully leveraging these growth opportunities, particularly early on in their academic careers. Meanwhile, paid internships—which are more closely tied to professional skill development—may be encouraged later in a student’s college career in a format that is more decoupled from the academic curriculum. One hypothetical model might include a three-credit academic course for unpaid internships and a zero-credit course for paid internships, with each type of experience carrying implications for degree completion. This concept aligns closely with Kolb’s model of experiential learning, which suggests the need for various levels of concrete experience and emphasizes reflection as a gateway to higher levels of abstract thought.¹³

A greater emphasis on tracking internship and work experiences would not only facilitate ongoing research and assessment, but could also be useful in the creation of strategic interventions for students who are at risk. Since unpaid internships are correlated negatively to a number of desired employment outcomes, students who overemphasize these forms of experience should be informed of the potential risks and, if necessary, supported in creating a plan for broadening their experience.

Above all, one thing remains clear: While unpaid internships remain controversial within both the court of public opinion and the field of student development, they are not likely to go away any time soon. These experiences, while not as empirically beneficial as paid internships, still lead to important gains for many of our students. As career development professionals, we have an obligation to help our students understand the multifaceted risks and benefits of such opportunities and, if possible, leverage all of their internship experiences on the path to desired graduate outcomes.

End Notes

¹ National Association of Colleges and Employers (2011). Position statement: U.S. internships. Retrieved from http://www.naceweb.org/advocacy/position-statements/united-states-internships.aspx

² Beard, F., & Morton, L. (1999). Effects of internship predictors on successful field experience. Journalism & mass communication educator, 53(4), 42.

³ Gardner, P. (2011). The debate over unpaid college internships. Intern Bridge. Retrieved from citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.372.1710&rep=rep1&type=pdf

⁴ National Association of Colleges and Employers (2015). Executive summary: 2015 internship & co-op survey. Retrieved from http://www.naceweb.org/surveys/internship-co-op.aspx and National Association of Colleges and Employers (2015). The class of 2015: Executive summary. Retrieved from http://www.naceweb.org/surveys/student.aspx

^{5, 6} Kolb, D. (1984). Experiential learning: Experience as the source of learning development. Prentice-Hall: New Jersey.

⁷ Super, D. E. 1. (1963). Career development: self-concept theory: Essays in vocational development. New York: College Entrance Examination Board.

⁸ Bandura, A. (1997). Self-efficacy: The exercise of control. New York: W.H. Freeman.

⁹ Creswell, J. W. (2014). Research design: Qualitative, quantitative, and mixed methods approaches. Sage publications.

¹⁰ Gardner, P. (2011).

^{11, 12. 13} Kolb, D. (1984).

This article provides highlights from the Crain’s study “Understanding the Impact of Unpaid Internships on College Student Career Development and Employment Outcomes,” which was conducted on behalf of and funded by the NACE Foundation. Download the free study.