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Division of Labour

Division of Labour is a method in which a production procedure is split into different stages. Workers are solely responsible for a particular stage and so gain expertise in doing this. This makes them more productive and efficient. Also less time is wasted in moving through different stages. 

This specialisation of certain roles allows workers to be more productive. Therefore output should increase. Division of Labour was wrote about by the famous economist Adam Smith in the Wealth of Nations. 


  • Improved productivity due to specialisation 
  • Production per good is lower
  • Workers can increase their expertise in their specific field
  • Leads to an increase in output
  • Workers may receive higher pay for their specialised job
  • Some people aren't good at certain tasks; they wouldn't specialise in these and hence production would be better
  • If workers are specialised then there quality may improve as they are very good at that specific task (although they may become bored/demotivated and quality may fall)


  • There is a large cost to train these workers so they become specialised
  • If a specialised worker is ill or leaves work then the production process may have to be halted until a replacement can be found and or trained. This is expensive as output isn't being produced and there is the cost of training/hiring a new worker.
  • Quality of the good may fall if the worker gets demotivated from the same task
  • Workers may become bored doing the same mundane task; they may prefer variety which specialisation doesn't offer them.
  • It may be easier to replace a specialised worker with a machine as their task is quite specific (although this can't happen to all tasks).

Adam Smith provided an example of this; in a day 1 worker could create a maximum of 20 pins, so 10 workers could create 200 a day. However if the production process was split into 10 different stages, with one worker on each stage the maximum production would dramatically increase to 48,000 pins produced a day.

A domestic example of division of labour is washing the dishes. It is much quicker if one person washes the dishes and one person dries them and another puts them away than it is if there are 3 sinks and each person had to do all 3 tasks.

Page last updated on 20/10/13