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; PPP) on the formal employment trajectories of people with disabilities (PwD). Using administrative data from 2002 to 2023 and a staggered difference-in-differences design, we estimate that program participation increases formal employment and improves employment stability over time. The average 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 6 or 12 months of formal work per year--and total months in formal jobs. About three-quarters of the observed employment gains arise from jobs at firms other than the initial internship host, indicating broad integration into the formal labor market, not just formalization of preexisting ties. These results are robust to alternative specifications and pre-trend tests. The effects are larger for individuals residing in the capital city and those placed in medium-sized and large firms, and smaller for individuals with mental disabilities. No clear differences are found by age or gender. We find no evidence of changes in participating firms hiring behavior toward PwD after hosting a PPP intern with a disability. These findings suggest that internship programs can reduce labor market gaps for PwD in developing countries, with patterns consistent with three mechanisms: alleviating informational frictions, raising expectations about employment prospects, and acquiring transferable skills.