Climate Change and Inequality

Carolyn Chisadza, Matthew Clance, Xin Sheng () and Rangan Gupta
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Xin Sheng: Lord Ashcroft International Business School, Anglia Ruskin University, Chelmsford, United Kingdom

No 202244, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper examines the effects of climate change on income inequality in the United States. Computing IRFs from the local projections method, we empirically show that there is an immediate temporary positive response in income inequality from rising temperatures. We also find that the shock on income inequality is not permanent. However, if the effects of rising temperatures are unabated, income inequality starts to rise in the later periods and continues to rise well above its steady state. 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: D63 O13 O51 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2022-09
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Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:202244

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