The Role of Skills and Wages in Early Career Occupation Mobility: Evidence from Hungary

This study investigates the patterns and determinants of occupation mobility among young workers with medium-level qualifications in Hungary during their first 4-8 years in the labor market. Utilizing linked employer-employee panel data augmented with standardized test scores from grade 10, we examine the relationship between occupation mobility, wages, and skills. Our findings indicate that wages are generally negatively associated with occupation mobility, both within broad occupation categories and specific occupations. However, occupation mobility shows little correlation with test scores. High-wage workers are less likely to change occupations, but when they do, they tend to move to higher positions within the occupational hierarchy, similar to high-skill workers. These results suggest that while wages and occupation mobility are interconnected, the role of direct skill measures in explaining mobility patterns is limited. The study contributes to the understanding of early career dynamics and the factors influencing occupational transitions.