Date of Graduation
Master of Science in International and Development Economics (MSIDEC)
College of Arts and Sciences
This paper tests the predictions of the Stolper-Samuelson Theorem in India after it underwent major trade reform in 1991. Using industry level tariff data, the paper empirically examines trade liberalization’s effect on the wages of high-skilled labor relative to low skilled labor within firms. The study finds empirical evidence to support growing wage differentials within firms, which contradict the predictions of the Stolper-Samuelson Theorem. Additionally, when controlling for firm size and the effects of the global financial crisis, these results remain robust. Finally, the paper explores training and welfare and R&D’s effect on the wage differentials within firms, finding a direct relationship between training and welfare expenditures and executive compensation but no significant impact of R&D expenditure.
Michael, Anthony M., "Evaluating Stolper-Samuelson: Trade Liberalization & Wage Inequality in India" (2016). Master's Theses. 179.