Labor Market Impacts of an Internship Program on People with Disabilities

This paper examines the impact of an internship program in Argentina (Programa Primer Paso) on the formal employment trajectories of People with Disabilities (PwD). Using administrative data from 2002–2023 and a staggered differencein-differences design, we estimate that program participation persistently increases formal employment and improves employment stability over time. On average, the probability of being formally employed rises by about 8 percentage points within three years after treatment, with the effect growing over time. The program also increases sustained employment—measured as at least six or twelve months of formal work per year—as well as the total number of months in formal jobs. Importantly, about three-quarters of the observed employment gains arise from jobs at firms other than the initial internship host, indicating broader integration into the formal labor market rather than the formalization of pre-existing ties. These results are robust to alternative specifications and pre-trend tests. The effects are larger for individuals residing in the capital city and for those placed in medium- and large-sized firms,while they are smaller for individuals with mental disabilities. No clear differences are found by age or gender. From the perspective of participating firms, we find no evidence of changes in their hiring behavior toward PwD after hosting a PPP intern with a disability. These findings suggest that internship programs can be an effective tool to reduce labor market gaps for people with disabilities in developing countries, with patterns consistent with the alleviation of informational frictions, the raising of expectations about employment prospects, and the acquisition of transferable skills.