Occupational Mobility Within and Between Skill Clusters: An Empirical Analysis Based on the Skill-Weights Approach

Mobility and flexibility is increasingly demanded as structural change challenges estab-lished educational systems and traditional occupational demarcations. We use Lazear’s skill-weights approach (2003) first to operationalize the degree of specificity of skill com-binations in an innovative manner and second to derive hypotheses about the effects of occupation-specific skill combinations. In our empirical section, we find that the more specific an occupation, the smaller is the probability of an occupational change, as ex-pected. Furthermore, we are able to identify different clusters of occupations that are char-acterized by similar skill combinations within a given cluster and different skill combina-tions between clusters. We find that employees in very specific occupations have a com-paratively higher probability of changing their occupation within than between skill clus-ters. Moreover, occupational mobility within a skill cluster is accompanied by wage gains, while mobility between skill clusters results in wage losses. Not surprisingly, the more specific the former occupation is, either the higher is the resulting wage loss or the smaller is the resulting wage gain depending on whether the move is between or within skill clus-ters, respectively. Therefore, the acquired skill combination rather than the occupation per se crucially determines the mobility of an employee.