The rise of intangible capital and labour market segmentation

Abstract

Labour is becoming an important asset vis-à-vis physical capital as the asset structures of firms change over time. The peculiarities of labour assets are that they appreciate with usage rather than depreciate. In contrast with physical capital, over-use leads to an increase in their value and under-use leads to an erosion. The more able or those considered to have the most potential are generally recruited to the asset sector of the labour market where positive work experiences are reinforcing while the less able or those considered to have less potential are excluded. Accordingly, the work experiences and skills of the labour force becomes more polarised.