FINANCIAL IMPACTS OF UNPAID PLACEMENTS IN HEALTHCARE, EDUCATION, AND SOCIAL SERVICES

AuthorS: LEIGHTON WATSON AND BEX HOWELLS

Many essential service roles in healthcare and social services, such as nursing, midwifery, social work, and teaching, require tertiary qualifications during which students must complete unpaid placements. Placements requirements can range from 24 weeks for teaching to 60 weeks for midwifery. Throughout their studies, students must pay fees to tertiary education providers and are often unable to work during placements due to the high workload, variable hours, and potential to relocate or travel long distances to their placement location. Unpaid placements are a significant financial challenge, particularly for those with dependents, financial commitments, or without a strong support network. Dropout rates from these programmes are very higher with 45% of social work students and 42% of midwifery students not completing their degree – leaving only with debt.

The common assumption is that the three to four year “short-term” financial sacrifice of time out of the workforce studying and upskilling, paying course fees, and working on unpaid placements is rewarded with “long-term” financial gains due to higher salaries upon graduating. Our research(1), however, shows that this is not the case, particularly for those retraining later in life.

We compared lifetime earnings for a worker in teaching, nursing, social work, and midwifery along with someone working a minimum wage job. It takes more than eight years since starting to study for a nurse to make more money than the minimum wage worker and 12 years for a social worker. When considering retirement savings, it can take more than 12 years before a teacher or midwifery has higher retirement savings than a minimum wage worker – which has implications on first home purchasing as well as retirement balances. These are highly conservative estimates because it assumes that the minimum wage worker stays at minimum wage for over a decade.

Police and firefighters are also essential public service roles, but the training period is much shorter (5 months for police, 3 months for firefighters), trainees are paid, and dropout rates are less than 2%. Despite higher salaries, it takes 14 years since starting to study for nurses and an astounding 28 years for midwives to have higher total earnings over their working lifetime than police officers with very similar numbers when compared with firefighters. Retirement savings never catch up due to the industry specific retirement savings schemes for police and firefighters. We also note that police (74% of police constables are male) and firefighters (97% of career firefighters are male) are male dominated professions whereas the education (76% of teachers are female), social services (85% of social workers are female), and healthcare (87% of nurses are female) sectors are female dominated with women much more likely to take career breaks due to childcare responsibilities.

Australia has recognised the issue of unpaid placements and from 1 July 2025 will start paying a stipend of $320 per week to students while they are on placements. If we want to recruit and retain workers in these essential services and stop the brain-drain to Australia, we need to rethink our education approach to reduce the short-term pain and improve the long-term gain.

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(1) Leighton M. Watson & Bex Howells (16 Feb 2025): Short-term pain forlong-term gain? Financial implications of university fees and unpaid placements on workersin healthcare and education industries, Journal of the Royal Society of New Zealand, DOI: 10.1080/03036758.2025.2460575