The Rise of Specialists in the Workplace: Productivity Gains, Coordination Costs, and Learning
Professor Katrine Vellesen Løken
Professor of Economics
NHH Norwegian School of Economics
We examine how the growing division of labor within firms affects productivity and human capital accumulation. Internal task specialization raises productivity through Ricardian gains from task trade, but it also increases the organizational costs of coordinating increasingly differentiated workers and tasks. Extending their framework, we argue that these coordination frictions interact with learning: as tasks become more specialized, firms expand managerial layers and devote more time to coordinating work, while worker interaction and collaboration decline, slowing co-worker learning and human capital growth. Using linked administrative and large-scale workplace survey data from Norway, we show that internal task specialization has risen steadily over time alongside sharp increases in coordination costs—both through expanded management structures and greater time spent on coordination activities. While specialization is associated with higher firm productivity and wage premia, it is also associated with weaker collaboration, slower learning, and lower subsequent wage growth among workers.
