The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
While trade integration has been an engine of global growth and prosperity some sectors have been negatively affected by increased imports competition, as expected in theory. Higher labor mobility could lower these adjustment costs. This paper measures the cost of trade integration in a context of high internal migration. Specifically, we focus on the 2004- 14 period of trade liberalization in Peru (a major beneficiary of trade integration). Despite significant migration in response to lower tariffs, we find a significant negative relation between tariff reduction and socioeconomic indicators of imports-competing districts. This underscores the need for policy action to support the 'losers from trade liberalization'.