Two Perspectives on Multiskilling and Product Market Volatility

DeVaro, Jed and Farnham, Martin (2010): Two Perspectives on Multiskilling and Product Market Volatility.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: job design, training
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M5 - Personnel Economics > M53 - Training; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

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