Abstract
Over the last 20 years Mexico has experienced rapid economic reforms which have impacted labor markets and, in particular, relative wages. Based on the fact that these changes have had a differential impact on different industries and different regions of the country, we explore changes in relative wages from 1987 to 1996 in the border city of Tijuana. Using wage regressions for different sections of Tijuana's labor market we find that skill premiums increased during this period. However, comparing results with those for Mexico City, we found that the increase in skill (education) premiums for high‐skilled workers in Tijuana is systematically smaller across industries. It seems, thus, that modernization has not radically changed the labor‐intensive nature of industrialization in Tijuana. It has increased the demand for skilled workers, but it has not done so either at the pace or at the level of Mexico City.
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