The reference paper shows that the relative demand, supply and wages for workers with higher levels of educational attainment are rising. There has been a sharp increase in the supply of workers with secondary education relative to those with primary education, and a
small increase in the supply of workers with tertiary education relative to those with secondary education. The relative wages for workers with secondary or higher education have risen steeply despite the increase in the supply of workers with greater educational attainment. Sànchez-Pàramo and Schady (2003: 4) comment that increases in the relative wages of skilled workers that occur simultaneously with increases in their relative supply provide strong evidence of an increase in the demand for skilled workers. Indeed, the relative demand for workers with higher levels of education is rising over time. This context paper aims to shed some light on the observed labour trends through reviewing changes in South Africa’s macroeconomic structure, education system and labour market over the period 1995-2002.