Date of Graduation

Spring 5-20-2016

Document Type


Degree Name

Master of Science in International and Development Economics (MSIDEC)


College of Arts and Sciences



First Advisor

Suparna Chakraborty


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.