while the relative supply of this group increased significantly over the two decades, with a stronger increase in the 2000s. This is consistent with a weak pattern of relative demand for workers with medium skill levels during 1997-2000 (so that the increase in supply reduced their relative wage), and a substantial increase in their relative demand afterwards, as witnessed by the small change in the corresponding wage premium in the context of a large increase in its relative supply.

The evolution of the wage skill premium in Brazil, meanwhile, shows a slow decline in the 1990s, and after a small increase in the turn of the century, a strong decline that intensified since 2006 (see the corresponding Figure C1 in the appendix). The strong increase in the relative supply of skilled labor, which accelerated in the 2000s, seems to have played a relevant role in the Brazilian case. The relative demand for skilled labor consistent with these patterns of premium and supply indicates a stable trend in the 1990s and a fall in the 2000s. Meanwhile, as depicted in Table 3.2, the relative supply of workers with secondary education with respect to lower skilled workers increased substantially over the two periods considered. This growth pattern accelerated in the 2000s: it grew at a faster pace than the increase in the relative supply of the high skill group. The relative wage of the middle skill group fell over the two periods at an increasing rate, and seems to have broadly followed from the evolution of its relative supply. The decade of 2000 was the period with the largest increase in the relative supply of the high and middle skill groups, and the evolution of the wage premium for both groups indicates that demand factors were not enough to compensate for their increasing supply.

The evolution of these variables for Chile in Table 3.1 reveals an increase in the wage gap between the skilled and the unskilled in the 1990s, and after a short plateau, a fall throughout the 2000s. The relative supply of skilled workers increased over the two decades, although at a slower pace in the 2000s. These patterns of wages and supply are consistent with a strong increase in the demand for skilled labor in the 1990s and a fall in the 2000s.<sup>25</sup> The pattern for the high school-dropout relative remuneration, presented in Table 3.2, is similar to the evolution of the aggregate wage skill premium: it increased slightly over the 1990-2000 decade, and fell significantly (-1.8 per year on average) for the 2000-2009 period. The main difference with the aggregate skilled-unskilled trend is the evolution of the relative supply: workers with secondary education increased substantially for both decades, and the relative change of the high school group with respect to dropouts was larger than the relative increase for the higher skill group. This pattern indicates the presence of an increasing relative demand for workers with secondary education in the 1990s, which counterbalanced the negative effect of the increase in their supply on the corresponding wage premium, and a lower impact of demand factors for this group in the following decade.

The household surveys in Colombia have changed substantially over the period under analysis, posing substantial challenges for the analysis of patterns over time. Table 3.1 and 3.2 report changes in these variables for two episodes for which surveys are comparable to a reasonable degree – 1996 to 2000 and 2001 to 2007. During the first period, the wage skill premium became substantially larger, despite a strong increase in the relative labor supply of skilled workers. This combination suggests a strong increase in the relative demand for skilled labor. In contrast, the 2000s have

> 25 The pattern of a roughly constant wage skill premium and sizeable increase in the relative supply of skilled labor in the 1990s, and the conclusion on the relevance of changes in the relative demand for this factor over the decade, coincide with the findings of Gallego (2011), who uses a longer data series that covers only the Greater Santiago metropolitan area.

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