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Generation Internship: The Impact of Internships on Early Labour Market Performance

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  • Cerulli-Harms, Annette

    (London Economics)

Abstract

Many university graduates conduct internships before starting to work in a direct-hire job. I analyse the effects of internships on early labour market performance to evaluate whether they enhance or hinder the university-to-work transition. I use propensity score matching to identify graduates that resemble each other in important characteristics such as cognitive ability, and only differ with respect to the internship experience. This allows comparison between interns and non-interns in key dimensions of job market performance: monthly earnings, employment status, and job satisfaction. The results suggest that internships have detrimental effects across dimensions. Graduates with an internship experience are significantly less likely to be employed one year after graduation, and, if employed, earn significantly less than their non-intern peers. However, the negative effects are short-lived and vanish within five years. Due to this catching up, I can rule out that interns are a negative selection of all graduates. Instead it seems that the internship sends a negative signal to prospective employers and is thus causing the underperformance at job entry. The measured effects are less pronounced for female interns.

Suggested Citation

  • Cerulli-Harms, Annette, 2017. "Generation Internship: The Impact of Internships on Early Labour Market Performance," IZA Discussion Papers 11163, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11163
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    Cited by:

    1. Baert, By Stijn & Neyt, Brecht & Siedler, Thomas & Tobback, Ilse & Verhaest, Dieter, 2021. "Student internships and employment opportunities after graduation: A field experiment," Economics of Education Review, Elsevier, vol. 83(C).
    2. Pastore, Francesco & Pompili, Marco, 2019. "Assessing the impact of off- and on-the-job training on employment outcomes. A counterfactual evaluation of the PIPOL program," GLO Discussion Paper Series 333, Global Labor Organization (GLO).
    3. Chiara Natalie Focacci, 2020. "“You reap what you sow”: Do active labour market policies always increase job security? Evidence from the Youth Guarantee," European Journal of Law and Economics, Springer, vol. 49(3), pages 373-429, June.
    4. Francesco Pastore & Marco Pompili, 2020. "Assessing the Impact of Off-the-Job and On-the-Job Training on Employment Outcomes: A Counterfactual Evaluation of the PIPOL Program," Evaluation Review, , vol. 44(2-3), pages 145-184, April.

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    More about this item

    Keywords

    internships; temporary work; propensity score matching; youth employment; job-shopping;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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