Job rotation: Cost, benefits, and stylized facts

A fundamental principle of economics is that specialization and the divisio n of labor increase the productivity of workers by allowing them to concent rate on narrowly defined tasks. However, not all firms appear to promote a high degree of specialization, but instead rotate workers among several tas ks. This paper develops a simple model of work organization to identify the cost and benefits of job rotation and to determine the factors that affect a firm's choice between rotation and specialization. It then uses the mode l to explain some stylized facts regarding firms and organizations that emp loy or have historically employed rotation. (JEL: D 20, J 24, L 23, O 30).