IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Descrepancies between Supply and Demand and Adjustment Processes in the Labour Market

Listed author(s):
  • Myra Wieling
  • Lex Borghans

Changes in demand and supply in segments of the labour market will affect the labour market position of workers with an educational background in a related field of study. In one economic tradition such discrepancies between supply and demand are thought to lead to unemployment in the case of excess supply and to unfilled vacancies or skill shortages in the case of excess demand. The other neo‐classical oriented tradition expects wage adjustments to take fully account of these labour market imbalances, leading to higher wages for studies with excess demand and lower wages in case of excess supply. In practice the labour market might, on the one hand, be more flexible than suggested by the first approach, but on the other hand adjustment might be incomplete and not only wages but also other aspects of the employment relationship might be affected by a friction between supply and demand. This study examines the relationship between discrepancies between labour demand and supply on the one hand and manifestations of these tensions in the labour market experience of school‐leavers on the other hand. To investigate this relationship, a random coefficient model has been used, which allows for different adjustment processes for the various educational types, but still makes full use of all the information available in the data. The analyses provide insights about the importance of different adjustment processes and their complementarity and substitutability. We show that on average, supply surpluses lead to pressure to accept jobs at a level which is lower than the school‐leavers educational level, jobs with relatively low wages, and jobs with part‐time contracts. A direct link between supply surpluses and unemployment is only found for a few specific fields of study. Unemployment seems to occur mostly when school‐leavers do not take temporary jobs or jobs below their educational level in case of excess supply. Copyright Fondazione Giacomo Brodolini and Blackwell Publishers Ltd 2001.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by CEIS in its journal Labour.

Volume (Year): 15 (2001)
Issue (Month): 1 (March)
Pages: 33-56

in new window

Handle: RePEc:bla:labour:v:15:y:2001:i:1:p:33-56
Contact details of provider: Postal:
Via Columbia, 2 00133 Roma

Phone: 0039 06 2040234
Fax: 0039 06 2020687
Web page:

More information through EDIRC

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bla:labour:v:15:y:2001:i:1:p:33-56. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.