The degraded tertiary effect (or a demand-supply mismatch among younger cohorts) should show as a decline in the average hourly wage of younger workers in recent cohorts vis-à-vis workers of the same experience level in older cohorts. However, wages of college-educated workers declined for all ages but they declined faster for the oldest group (51+) and slower for the youngest one (23-30). The observed pattern would be more consistent with the skillsobsolescence explanation. In addition, if younger workers had a larger proportion of individuals with lower skills than their preceding cohorts, we would expect that inequality among younger workers would increase more (or decrease less) than for workers of other age groups. However, wage inequality among the younger age group declined. There is no clear difference in the pattern of inequality change among workers of different ages.

We show results for the evolution of wages over time and by cohort (similarly to Juhn et al., 1993). The oldest cohort (1950-1954) shows declines in wages since 2000. The earnings of that cohort have declined close to 40 percent. This is the largest decline in earnings for any cohort. The younger cohorts, 1980-1984 and 1985-1989 do not show a decline in earnings even after the macroeconomic crisis. That is, there is no evidence that workers of newer cohorts are receiving a lower wage when they enter the workforce. In fact, the younger cohorts are the only ones that show an increase in their earnings over time. Finally, we regress the log of the average wage of college-educated workers against age and cohort variables. Estimating the contribution of experience (controlling for education), education (controlling for age) and the interaction of education and experience), suggests that the wage of new entrants has been increasing with each cohort. Again, a result that is not consistent with a presence of increasingly less skilled college educated workers.

The paper is organized as follows. Section 2 introduces the data analyzed in this paper as well as some descriptive statistics. Section 3 presents the analysis of the evidence. Section 4 summarizes the results. Section 5 concludes.

# **2. Data**

We use the Labor Force Survey for each quarter starting in the second quarter of 2000. The Mexican labor force surveys are very similar to the Current Population Survey applied in the United States or other labor force surveys around the world. From 2000 to 2004 the survey used is the “ _Encuesta Nacional de Empleo_ ”, and from 2005 to 2014 it is the “ _Encuesta Nacional de Ocupación y Empleo_ ”.<sup>5</sup> Even though the questionnaire is slightly different, most of the key labor questions are the same across surveys: earnings, hours of work, occupation, etc., while the sampling is the same in both. The labor force surveys are representative at the national and state levels as well as by metropolitan area. In each quarter, approximately 120,000 households are interviewed. The

> 5 Both surveys have the same sample design. Although it is not common to employ the two surveys, we use them to provide a complete picture of wages in Mexico since 2000. Other studies that use both surveys are Campos, Hincapie and Rojas (2012) and Calderon (2014).

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