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Two Perspectives on Multiskilling and Product Market Volatility

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  • DeVaro, Jed
  • Farnham, Martin

Abstract

We study the effect of product market volatility on a firm’s choice between multiskilling and specialization. We construct a theoretical model that captures the tradeoff between multiskilling (which gives greater flexibility to reassign workers in production) and specialization (which provides workers with the expertise to respond to product market signals in their area of specialty). Using data from the 2004 WERS, a nationally-representative cross section of British establishments, we find that greater volatility is associated with greater specialization. This result holds both inside and outside of manufacturing, but consistent with our model, it holds only in multi-product establishments and not in single-product ones.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23089.

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Date of creation: 11 Mar 2010
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Handle: RePEc:pra:mprapa:23089

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Keywords: job design; training;

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References

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Cited by:
  1. Prasad, Suraj & Tran, Hien, 2013. "Work practices, incentives for skills, and training," Labour Economics, Elsevier, vol. 23(C), pages 66-76.

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