Campus Connection

Companies are increasingly offering internships, which can help a firm identify talent and recruit future employees. Meanwhile, internships are also great for college students. They are the most influential characteristic a student can have to land a job, employers say, according to National Association of Colleges and Employers Job Outlook 2018.

Despite obvious importance of an internships to students and employers, people know little about them.

UW-La Crosse Economics Professor John Nunley and a team of co-authors collaborated on a National Bureau of Economic Research working paper, now published online. It outlines nationwide studies the authors used to better understand the demand for interns and what leads to success in the internship market.

Their results help answer questions for both college students and employers. Here are five. For more details read the full paper.

Q: Should an internship be paid or not? This is a question many employers wonder about. An internship gives experience, which is valuable in and of itself. Yet, if an intern is contributing to a company’s bottom line — a strong argument could be made for the need to pay. Before making the judgement call, Nunley says it’s important to know more. Their research found internships are more likely to be paid when:

• They are more closely associated with a specific occupation
• The local labor market has lower unemployment
• The local and federal minimum wage are the same

Q: Is there a link between pay status and whether an internship is full-time? There is a strong link between full-time internships and paid status with 71% of full-time internships being paid. The opposite is true for part-time internships where 74% are unpaid.

Q: When are employers more likely to respond to a re?sume? for an internship position? A strong determinant of success in landing an internship is having held a previous internship. Prior internships raise the probably of a positive response for a subsequent internship by about 30 percent. This is different from usual college jobs such as lifeguarding or retail work that have little to no effect. (based on an audit of 11,500 applications).

Q: What factors make employers less likely to respond?

• When an applicant is located farther away from the firm. A 30 % increase in distance from the firm lead to an approximately .4 percentage point decrease in the probability of getting a positive response from the firm. (based on an audit of 11,500 applications)
• When applicants had distinctively black-sounding names their profiles received 1.7 percentage points fewer positive responses relative to an unconditional positive response rate of 6.7 percent for observationally equivalent profiles with white-sounding names.

Q: What type of internships are most prevalent in the U.S.? Unpaid and part time. While the number of internships per capita is higher on the coasts, paid internships are less common along the coasts than in the central U.S.

Other co-authors on the study include:

• David A. Jaeger, School of Economics and Finance, University of St. Andrews
• Alan Seals, Department of Economics Auburn University
• Eric J. Wilbrandt, Peachtree City, GA