Work-Based Learning and Early Career Outcomes: Evidence on Earnings, College-Level Employment, and Career Progression

Prior research has linked internships to career benefits for students. But are the benefits we see due to the internship itself or to other characteristics of students that make them both more likely to secure an internship and more likely to get a higher paying job after graduation? And do other forms of work-based learning also convey career benefits? In this study, we use a matching design on restricted-access data from the National Center for Education Statistics to analyze the link between work-based learning and employment outcomes for bachelor’s degree completers one and four years after graduation. Work-based learning pathways explored include paid and unpaid internships, co-ops, practica and federal work-study jobs. After pre-processing the data via nearest neighbor matching on student academic and demographic characteristics to approximate experimental conditions, we find evidence that paid internships are associated with higher earnings one and four years after completion, as well as higher likelihood of college-level employment and career progression. We hypothesize three key mechanisms by which work-based learning might improve employment outcomes: development of transferable skills, networking that facilitates access to professional connections, and resume signaling for employers that demonstrates otherwise unobservable qualities of a candidate. Our analysis provides some support to all three mechanisms, but the strongest case for the third mechanism: symbolic capital/ resume signaling. Unpaid internships and practica experiences are linked to higher likelihood of college-level employment and career progression, but not to earnings benefits.