Question

How does this type of investment pay off for both employers and their employees? Real life example?

Answer 1

If an employer hires people who are not qualified, the employer will have many problems. For example, the owner of a restaurant may hire a person who has not any diploma to clean up the toilets in his/ her shop. There is a relationship between the quality of the task and the person's qualifications. The less qualified the person is, the worse the type of job he/ she will get. Besides, these unskilled or not -qualified employees do not live near their work place and face real problems when their children fall ill. These make them be absent from work quite often. The restaurant toilets will be dirty on those days and this may affect the clients' mood. Clients tend to associate the state of the toilets with the state of the kitchen. Therefore, clients will stop coming to the restaurant and this will make the employer lose money.

On the other hand, if an employer hires a person who holds a Doctorate degree , the employer will have not many problems. A person who has a Doctorate degree tends to be in important places at work. They may be managers or share-holders and they make decisions. They are qualified to evaluate problems and think of solutions. As a consequence, the employer will earn more money and the quality of the product he / she offers will get better through time.

Answer 2

Answer

Focusing on higher education can be taken as a capital good related to human capital in that it builds developmental skills which are important in production activities. The higher the education level, the higher the average income of an individual.

Explanation

In real life, there is more focus on education because it creates improved citizens and aids in upgrading the standard of living in a society. An educated individual is an improved person because of new ideas and knowledge about the area of specialty which other people are not aware of. In addition, a higher the level of education is associated with higher income which can lead to an improved standard of living.