Abstract
QUANTITY adjustment plays an important role in a world where wages do not react freely to fluctuations in supply and demand. Employers use excess supply to increase qualification standards for new hires, producing a rise in the average qualification level for a given type of job. This mechanism is reinforced by the reaction of job-seekers. Finding their prospects of obtaining highly-ranked jobs blocked, they start accepting job offers that they would have rejected in a tight labour market. Job-seekers with the lowest qualifications cannot adjust their search strategy in this way; hence, this group's prospects of finding work are severely affected by a worsening of labour market conditions. This mechanism has been described by many authors since Reder (1955). It is relevant to all kinds of theoretical models which allow for at least some wage
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