Elisa Palagi: Income inequality and climate change

Speaker
Elisa Palagi (Sant’Anna School of Advanced Studies)
Event date
Event time
14:30
Venue
INET Oxford (in person and online)
Manor Road Building
Manor Road
Oxford
OX1 3UQ
Venue details

Seminar Room G and online

Event type
Lectures and seminars
Event cost
Free
Disabled access?
Yes
Booking required
Required

Climate anomalies, such as floods and droughts, as well as gradual temperature changes have been shown to adversely affect economies and societies. Although studies find that climate change might increase global inequality by widening disparities across countries, its effects on within-country income distribution have been little investigated, as has the role of rainfall anomalies. We show that extreme levels of precipitation exacerbate within-country income inequality. The strength and direction of the effect depends on the agricultural intensity of an economy. In high-agricultural-intensity countries, climate anomalies that negatively impact the agricultural sector lower incomes at the bottom end of the distribution and generate greater income inequality.

Our results indicate that a 1.5-SD increase in precipitation from average values has a 35-times-stronger impact on the bottom income shares for countries with high employment in agriculture compared to countries with low employment in the agricultural sector. Projections with modeled future precipitation and temperature reveal highly heterogeneous patterns on a global scale, with income inequality worsening in high-agricultural-intensity economies, particularly in Africa. Our findings suggest that rainfall anomalies and the degree of dependence on agriculture are crucial factors in assessing the negative impacts of climate change on the bottom of the income distribution.

About the speaker

Elisa Palagi is a Postdoctoral Researcher at the Institute of Economics at Sant’Anna School of Advanced Studies in Pisa, Italy. She is also a Fellow of the World Inequality Lab (WIL). Her research interests focus on economic inequality, its determinants and its impacts on macroeconomic dynamics, both from an empirical and a theoretical point of view.