Most university students complete an internship while pursuing an academic degree: some work during the semester breaks, others even take a whole semester off to gain some work experience. In Germany, nearly 80 percent of all students had at least done one internship at the time they have graduated. The immediate benefits of interning seem obvious: students get hands-on experience in a potential future occupation and might even establish a link to a future employer. On the other hand, there are also some downsides: interns are often poorly paid and some firms exploit highly qualified students as cheap labor. This eventually raises the question: does it pay off to do an internship?
In a new IZA Discussion Paper, Nils Saniter and Thomas Siedler show that it does. Later earnings of German students increase by about six percent when they gained some relevant work experience while studying. This effect is driven by a higher propensity to work full-time and a lower tendency to be unemployed in the first five years after graduation. The authors do not find different effects by gender, family background or high school performance. However, the positive effects of internships are significantly higher in study programs with weak labor market orientation. Although there is little evidence that doing internships improves job matching, Saniter and Siedler regard student internships as a “door opener” to the labor market.