Escobal, J., y Ponce, C. (2006). La liberación del comercio y el bienestar de la infancia: evaluando el impacto del Acuerdo de Libre Comercio entre perú y Estados Unidos. Lima: Niños del Milenio.

This paper assesses the short-term effects of a Peru-US FTA (TLC for its initials in Spanish) on the welfare of Peruvian households and in light of the results discusses the potential effects on child welfare. Section 2 briefly reviews the economic and social contexts in which the FTA will be implemented. Section 3 presents a brief review of the existing literature on the impact of trade liberalization on child welfare. Here we show that the results reported in the literature are mixed and depend on whether the sector is child labor intensive and whether the income effect is strong enough to overcome the magnitude of the substitution effect. Section 4 estimates the first-order distributional effects of a complete and abrupt tariff elimination in a general equilibrium context, modeling both the connection between trade policy and domestic prices and the connection between domestic prices and household welfare. The demographic profile of those who are negatively affected is also analyzed in order to assess whether children might be at risk. Finally, Section 5 presents the dilemmas that policy makers face.