Door Opener or Waste of Time? The Effects of Student Internships on Labor Market Outcomes

51 Pages Posted: 3 May 2014

See all articles by Nils Saniter

Nils Saniter

German Institute for Economic Research (DIW Berlin)

Thomas Siedler

University of Hamburg - Faculty of Business, Economics, and Social Sciences; DIW Berlin; Institute for the Study of Labor (IZA); University of Essex

Abstract

This paper studies the causal effect of student internship experience on labor market choices and wages later in life. We use variation in the introduction and abolishment of mandatory internships at German universities as an instrument for completing an internship while attending university. Employing longitudinal data from graduate surveys, we find positive and significant wage returns of about six percent in both OLS and IV regressions. This result is mainly driven by a higher propensity of working full-time and a lower propensity of being unemployed in the first five years after entering the labor market. Moreover, former interns pursue doctoral studies less frequently. The positive returns are particularly pronounced for individuals and areas of study that are characterized by a weak labor market orientation. Heterogeneous effects are not found across other subgroups of the population.

Keywords: internships, skill development, higher education, labor market returns, instrument variable

JEL Classification: I23, J01, J31

Suggested Citation

Saniter, Nils and Siedler, Thomas, Door Opener or Waste of Time? The Effects of Student Internships on Labor Market Outcomes. IZA Discussion Paper No. 8141. Available at SSRN: https://ssrn.com/abstract=2432425

Nils Saniter (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Thomas Siedler

University of Hamburg - Faculty of Business, Economics, and Social Sciences ( email )

Von-Melle-Park 9
Hamburg, 20146
Germany

DIW Berlin ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

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