Labour as an Asset: Can it Partition the Labour Market?

Melbourne Institute Working Paper No. 04/98

Date: January 1998


Elizabeth Webster


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. By contrast to 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 this 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. Regarding the aggregate labour market in this light may account for some of the observed changed in the labour market over the last few decades.

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