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. 2025 Feb 16;55(6):1921-1940.
doi: 10.1080/03036758.2025.2460575. eCollection 2025.

Short-term pain for long-term gain? Financial implications of university fees and unpaid placements on workers in healthcare and education industries

Leighton M Watson  1 , Bex Howells  2
Affiliations

Short-term pain for long-term gain? Financial implications of university fees and unpaid placements on workers in healthcare and education industries

Leighton M Watson et al. J R Soc N Z. .

Abstract

There are critical workforce shortages in the healthcare and education sectors around the world. This is the same in New Zealand where there are substantial shortages of teachers, nurses, midwives, and social workers as well as other healthcare professionals. In New Zealand, these careers require tertiary qualifications, during which students must partake in compulsory unpaid placements. This study develops a numerical model to explore the impact of unpaid training on long-term earnings and retirement savings. We show that it takes between 8.6 and 12.0 years since starting to study for graduates in these essential services to achieve cumulative earnings equivalent to those of minimum wage workers. It takes 14.3 years for nurses and 27.9 years for midwives to achieve cumulative earnings equivalent to those of police officers, who also perform an essential service but do not require tertiary qualifications and have paid training. The results indicate that the financial setbacks during unpaid training periods have long-lasting implications on graduates' financial stability and retirement savings. This study emphasises the need for policy interventions to address these disparities and support the financial wellbeing of workers in essential services, thereby ensuring a sustainable workforce in healthcare and education sectors.

Keywords: Economic modelling; essential services; gender pay gap; paid placements; retirement savings; salary.

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Conflict of interest statement

Watson has no conflicts of interest to declare. Howells is the former campaign lead for Paid Placement Aotearoa, which advocates for paid placements in tertiary education programs across the health and social services.

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