First, we need to know whether firm is going to hire workers for long term or short-term time period

First, we need to know whether firm is going to hire workers for long term or short-term time period. In the short-term firms try to hire number of workers where marginal product hits the cost which is obtained from adding another employee to the firm. However, in the long run firm efforts to find correct portions of how much to employ and how much plant and equipment is taken and isoquant curves helps to describe these situations. Among the different inputs firm has more skilled-worker input which means that firm is able to use more skilled workers in its labor-capital substitution.

As we discussed in the previous question educational individuals increases education premium in the labor market as well as requires higher earnings. Moreover, in the labor market with more effective educated people exists low unemployment rates. Actions of educated people in the global labor market no only protects them from the unemployment problems but also increase firm’s productivity due to their high skills. Also, this kind of educational attainment results on high quality contract forms and well scheduled time arrangements as well as makes enough satisfaction on employers.