Definition of division of labour (worker specialisation)

Micro‑economic Decision‑makers – Workers

Objective

Define division of labour (worker specialisation), explain why firms use it, and cover the IGCSE 0455 sub‑topics on workers:

• Factors influencing occupational choice (3.3.1)
• Wage determination (3.3.2)
• Reasons for wage differences (3.3.3)
• Mobility of labour (3.3.4)
• Advantages and disadvantages of division of labour (3.3.5)

1. Division of Labour (3.3.5)

Definition

Division of labour is the process of breaking a production process into a series of separate tasks, each performed by a different worker or group of workers who become specialised in that task.

Key Features

• Each worker carries out a narrow set of activities.
• Workers develop specific skills and expertise (specialisation).
• Tasks are arranged in a logical sequence that leads to the final product.

Why Firms Encourage Specialisation

1. Higher output (productivity) – Repeating the same task reduces the time taken per unit (learning‑by‑doing).
2. Lower per‑unit cost of production – Greater efficiency reduces the cost of each unit.
3. Improved quality and consistency – Specialisation raises skill level and standards.
4. Facilitates the use of machinery and technology – Simple, repetitive tasks can be mechanised.

Advantages (as listed in the syllabus)

• Higher output per worker (greater productivity).
• Lower per‑unit cost of production.
• Improved product quality and consistency.
• Facilitates the introduction of machinery and technology.

Disadvantages (as listed in the syllabus)

• Monotony can lower worker morale and increase absenteeism.
• Workers acquire only narrow skills, making them less adaptable.
• Production becomes dependent on a smooth flow of intermediate products; a breakdown at one stage can halt the whole process.
• Potential for increased unemployment if fewer workers are needed for each specialised task.

Illustrative Example – Shoe Factory

A factory produces 1,000 pairs of shoes per week.

Productivity gain:

Traditional: 1 pair / 4.5 h ≈ 0.22 pairs h⁻¹

Specialised: 1 pair / 1.2 h ≈ 0.83 pairs h⁻¹

→ Productivity rises by about 275 %.

Diagrammatic Representation

2. Factors Influencing Occupational Choice (3.3.1)

• Wage level – Higher expected earnings attract workers.
• Non‑wage factors – Working conditions, status, job security, personal interest and satisfaction.
• Education and skills – Qualifications and training required for the occupation.
• Geographic location – Proximity to home, transport costs, regional job availability.
• Family and cultural influences – Family expectations, tradition and cultural norms.
• Age – Younger workers may prefer flexible hours or part‑time work, while older workers may value security.

3. Wage Determination (3.3.2)

Labour‑market diagram (description)

The diagram has wage (price) on the vertical axis and quantity of labour on the horizontal axis.

• Labour demand (DL) slopes downwards – derived from the demand for the firm’s product.
• Labour supply (SL) slopes upwards – reflects the willingness of workers to work at different wages.
• Equilibrium where DL = SL determines the market wage and employment level.
• Minimum‑wage floor (National Minimum Wage – NMW) set above equilibrium creates a surplus of labour (unemployment) but raises the earnings of those who retain a job.
• Trade‑union bargaining can shift the demand curve leftwards (higher wage, lower employment) or shift the supply curve rightwards (more workers attracted by higher wages).

Factors that shift the curves

• Demand‑side factors – change in product demand, technological progress (reduces labour needed), input prices.
• Supply‑side factors – population growth, changes in education and skill levels, migration, changes in workers’ preferences.

Minimum Wage & Trade‑Union Power – Advantages & Disadvantages

4. Reasons for Differences in Wages (3.3.3)

• Productivity / skill level – More skilled or more productive workers command higher wages.
• Sector of employment – Primary, secondary and tertiary sectors often pay different rates.
• Discrimination – Wages may vary by gender, ethnicity or age for reasons unrelated to productivity.
• Public vs. private sector – Public jobs may pay less but offer greater security and benefits.
• Bargaining power – Strong unions or scarce specialised skills can push wages up.
• Geographic location – Regional wage differentials arise from cost‑of‑living differences and local labour market conditions.
• Experience / tenure – Longer service and on‑the‑job experience usually lead to higher pay.

5. Mobility of Labour (3.3.4)

Labour mobility is the ability of workers to move:

• Occupational mobility – Switching from one type of job to another, often through further training or education.
• Geographical mobility – Relocating to a different city, region or country in search of better employment.

Causes of Mobility

• Availability of training and further education.
• Migration policies, visa regulations and work permits.
• Transport costs and housing affordability.
• Differences in regional wage rates and employment opportunities.

Consequences

• Wage convergence – Movement of workers from high‑wage to low‑wage regions can narrow regional wage gaps.
• Wage divergence – If skilled workers concentrate in high‑pay areas, wage differentials may widen.
• Brain‑drain – Emigration of highly skilled workers from developing to developed economies can reduce the source country’s human‑capital stock.
• Reduced regional unemployment where labour moves to where jobs are available.

6. Summary

Division of labour allows workers to specialise, raising productivity, lowering per‑unit costs, improving quality and enabling the use of machinery. Its disadvantages include monotony, narrow skill sets, dependence on a smooth production flow and possible unemployment. Understanding the factors that influence occupational choice, the way wages are determined, why wages differ, and the degree of labour mobility gives a complete picture of the micro‑economic decisions made by workers and firms.