The impact of work placements on graduate earnings

Abstract

This study investigates whether the completion of an optional ‘sandwich’ work placement enhances graduate starting salaries. We use a variety of multivariate regression techniques to investigate this issue and find that the graduate starting salaries of students who took professional work placements were significantly higher by £1686 ($2105) compared to non-placement students. We make a methodological contribution to the literature by controlling for self-selection bias. That is, our analysis takes into consideration that certain students self-select in to work placements and that they would have had higher starting salaries regardless of whether choosing to take a work placement. Additional insights showed that placements may be detrimental in terms of alleviating class and gender pay inequality but may have helped to reduce ethnic pay inequality. Our results have important implications for graduate employability and its impact on wider society.