Fostering employment match? Graduates’ Internships and Early Professional Experiences between Individuals’ Choices and Institutional Constraints

In Italy, internships were introduced in higher education to ease graduates' entry into the labor market, addressing youth unemployment and overeducation attributed to low job-specific skills. We investigate whether internships during and after the degree program improve employment quality, specifically in terms of coherence between the job obtained and the educational level achieved. We employ both a longitudinal approach and Propensity Score Matching (PSM) to examine the associations between curricular and extracurricular internships, and the number of job episodes after graduation, with the risk of overeducation among master’s graduates. The findings suggest that curricular internships, if at all, do not affect the likelihood of obtaining a matching qualified job. Extracurricular internships are instead associated with a higher risk of overeducation. Additionally, the risk of overeducation does not decrease with more job episodes and even rises in the South, where opportunities are scarcer. We conclude that internships may help secure employment but at the cost of overeducation for graduates. This study fills a gap by analyzing the impact of both curricular and extracurricular internships on employment quality in terms of occupational coherence. In doing so, it assesses policies on graduates' professional experiences over the last 20 years. By employing both longitudinal analysis and PSM quasiexperimental models, it aims to address selection bias related to unobserved characteristics in observational datasets and panel attrition. Theoretically, it advances by analyzing the determinants of overeducation while accounting for territorial differences in labor demand, and better assessing the contrasting predictions of human capital versus credentialist theories.