Ability, Specialization, and 'Economic Imperialism'

Abstract

In market situations, workers specialize to differing degrees. Previous literature on specialization has focused on cases in which workers who have no comparative advantages still specialize because of increasing returns; but all workers specialize to the same degree. This paper extends the model in a logical way to allow for workers who, though lacking comparative advantage, differ in ability, and finds that workers of differing abilities will specialize to differing degrees. In particular, if general skill is substitutable (complementary) for specialized knowledge in production, then the more able workers will tend to generalize (specialize). Empirical work on the specific case of academic research in economics illustrates the result, indicating that abler economists tend to publish more general research. Substitutability between general and specialized knowledge may explain the recent phenomenon of economic imperialism in the social sciences.