This study examines changes in the structure of employment and wages on Taiwan labor market over the 1978-96 period. Except for construction, those industries which are relatively more low-skilled intensive are also the industries losing employment, and those industries which are relatively more high-skilled intensive are he industries gaining employment over this period. While educational expansion policy increases number of college graduates entering the labor market, the returns to college education rose for more experienced college graduates but fell for the young, implying these two groups of workers are not close substitutes. Women's relative employment and wages increase dramatically, making female-male wage gap narrower.