Internships help immunize college graduates against underemployment

Commencement 2014AUBURN UNIVERSITY – That low-paying internship you worked in college may have a bigger impact on your future employment than you realize.

A recent study found that those who are underemployed, or have accepted a job beneath their skill set, receive 15-30 percent fewer interview requests than job seekers who became ‘adequately’ employed after graduation. However, college internship experience obtained by job seekers reduces the negative effects of underemployment substantially.

The authors of the study, Auburn University’s Alan Seals, the University of Wisconsin-LaCrosse’s John Nunley and Adam Pugh and the University of Pennsylvania’s Nicholas Romero, submitted resumes to 2,000 online job postings in seven cities – Atlanta, Baltimore, Boston, Dallas, Los Angeles, Minneapolis and Portland – across job categories including banking, financial services, insurance, management, marketing and sales.

“Between January and July of last year, we sent out about 9,000 fictitious resumes from recent college graduates to online job postings,” said Seals, an assistant professor of economics in Auburn’s College of Liberal Arts. “We randomized the characteristics on the resumes – work experience, degrees, internship experience – and then calculated the difference in interview requests across these randomly assigned characteristics.”

Alan Seals

Alan Seals

Job seekers in the team’s sample included those unemployed at the time of application, those who had an initial spell of unemployment after graduation or those who had continuous employment following graduation. Because recent college graduates are likely to experience underemployment, applicants were randomly assigned work experience that either required no college education or required a college education and was specific to the industry of the potential employer.

“We find that potential employers do not take into account unemployment spells, even a year long, when deciding whether or not to interview a candidate,” Seals said. “However, we find that employers discriminate heavily against candidates who accept a job that is beneath his or her skill set or does not require a college degree.”

But the researchers found that internship experience obtained during the completion of one’s degree reduces the interview-request gap between the currently underemployed and the currently adequately employed by about 50 percent, while internship experience completely eliminates the interview-request gap between the previously underemployed and the previously adequately employed.

“To me, the take-home message is that for recent college graduates it is worse to take a job which does not require a college degree than it is to search for a job that does require a college degree while remaining unemployed,” Seals said. “The internships have a remarkably large and long-lasting effect on subsequent employment opportunities. This explains why so many young people are willing to work as interns for so little, or even, where allowed, for nothing at all.”

Contact: Alan Seals, Department of Economics, (615) 943-3911, (ras0029@auburn.edu),
Mike Clardy, Office of Communications and Marketing, (334) 844-9999 (clardch@auburn.edu)