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Trade Liberalization in Peru: Adjustment Costs Amidst High Labor Mobility
Author:
Elin Baldárrago null

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Mr. Gonzalo Salinas
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Series:
IMF Working Papers
Volume/Issue:
Volume 2017: Issue 047
Language:
English
Publication Date:
09 Mar 2017
DOI:
https://doi.org/10.5089/9781475585568.001
ISBN:
9781475585568
ISSN:
1018-5941
Pages:
26
Keywords:
WP; tariff; liberalization; import; District tariff reduction; Trade Liberalization; Poverty; Peru; tariff reduction; import tariff; district tariff indicator; District level tariff; District tariff; MFN tariff; tariff barrier; poverty gap; imports-competition channel; barriers coverage; tariff line; tariff measure; Tariffs; Imports; Labor mobility; Global; South America
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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While trade integration has been an engine of global growth and prosperity, as suggested by theory, some sectors have been negatively affected by increased import competition. We test if this negative effect is significant in a context of high intranational migration, as theory indicates that labor mobility could reduce it. We focus on the 2004-14 period of trade liberalization in Peru (a major beneficiary of trade integration), which allows for methodological improvements relative to similar studies. We find that districts competing with liberalized imports experienced significantly lower growth in consumption per capita despite some emigration in response to increased import competition. This underscores the need to support the “losers of trade liberalization” even amidst high labor mobility.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund