Over the past four decades, Indonesia has experienced a series of major social and economic changes against a background of almost uninterrupted economic growth. Two of the more important features of socio-economic development during this period have been the surge in rural–urban migration and the spread of mass education. The continuing flow of rural migrants to the cities, attracted by job opportunities and the prospect of higher earnings, has contributed to a marked reduction of poverty in Indonesia.

The process of rural–urban migration is likely to have important implications for social and economic mobility. Specifically, occupational mobility can serve as an effective channel for achieving improvements in income and reductions in poverty and inequality because of its close association with career progression and earnings. Few studies, however, have looked into issues related to occupational mobility in Indonesia, especially among rural–urban migrants. This chapter attempts to shed light on this topic by investigating migrants’ choice of first occupation in the city, patterns of subsequent occupational mobility and the determinants of stability or change, in the context of economic and social changes over the past few decades.

In studying the experiences of migrants to developed countries, especially the United States, the economics literature finds strong evidence of downgrading of occupational status when immigrants first arrive in a country. But is this phenomenon exclusive to international migration? And how do migrants – both domestic and international – fare over time? In many respects rural–urban and international migrants face a similar set of challenges and risks in the destination labour market, despite the differences between those who choose to migrate internationally and those who choose to relocate internally. These risks include the possibility that one's qualifications may be discounted or not recognised, a lack of job networks and knowledge about the local labour market, credit constraints and a general lack of social support.

This chapter focuses on occupational choice and mobility among internal migrants living in four Indonesian cities. Using data from the 2008 and 2009 waves of the Rural–Urban Migration in China and Indonesia (RUMiCI) project (http://rumici.anu.edu.au), we examine the choice of first occupation in the city, and compare it with the occupation in 2009.