The Division of Labor, Local Markets, and Worker Organization

Abstract

The model developed here explains differences in the degree of the division of labor across local markets. For example, the typical doctor in one local market may treat a wider range of patients' problems than his counterpart in another local market. The extent of the division of labor depends on variables affecting the local demand for services. Two different forms of worker organization, cooperation and noncooperation, yield divergent results. For example, specialization increases with the local number of producers under cooperation but may decrease under noncooperation. With the number of producers constant, local demand variables affect individual specialization under noncooperation but not under cooperation.