Climate Change and Inequality: Evidence from the United States

Carolyn Chisadza, Matthew Clance, Xin Sheng and Rangan Gupta
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Xin Sheng: Lord Ashcroft International Business School, Anglia Ruskin University, Chelmsford CM1 1SQ, UK

Sustainability, 2023, vol. 15, issue 6, 1-11

Abstract: This paper examines the effects of climate change on income inequality in the United States. Computing impulse response functions (IRFs) from the local projections’ method, we empirically show that there is an immediate temporary positive response in income inequality from rising temperatures within the first year. We also observe differences in the effects of temperature growth on inequality across different classifications, mainly states with high inequality and low temperature growth are more susceptible to changes in temperature growth than states with already high temperature growth and high inequality growth. States with low inequality growth exhibit similar positive effects on income inequality across low- and high-temperature-growth classifications. We find that the initial positive effect on income inequality is not permanent. However, if the effects of rising temperatures are unabated in the earlier periods, income inequality starts to rise in the later periods. Our results highlight an important pathway, that climate change can negatively affect sustainable development through increased income inequality.

Keywords: temperatures; climate change; income inequality; United States (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:6:p:5322-:d:1099771

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