When choice excels obligation: about the effects of mandatory and voluntary internships on labour market outcomes for university graduates

Mandatory and voluntary internships present widespread opportunities for graduates of tertiary education to gain relevant work- and on-the-job experience during their years of study. However, it is questionable if these actually have positive effects on outcomes (income, job mismatch, and overall job satisfaction). By estimating linear and logistic regression models using data from Austria, we demonstrate that voluntary internships are associated with significantly better labour market outcomes across all models and dependent variables, while we find no complementary effects for mandatory internships. Advanced analyses underline that the functional form between all three dependent variables and length of voluntary internships is linear. Furthermore, we find no significant interaction effects between internships and other working episodes during the time of study. Both students, with and without field-related working experience, profit from extra-curricular internships. In summary, voluntary internships are associated with improved outcomes for both graduates, with and without other episodes of labour market experience, and study-related employment episodes cannot substitute the benefits of regular internships.