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Thursday, November 24th 2022

Edouard Pignède (PSAE) will present “Who carries the burden of climate change : heterogeneous impact of drought in Sub-Saharan Africa”.

Droughts can dramatically affect economic activity, especially in developing regions where more than half of the labor force is located in the agricultural sector. In this paper, I highlight droughts' heterogeneous and causal impact on per capita income using a new methodology – the quantile treatment effect- while controlling for a set of critical endowments for development (education level, access to major cities, and proximity to forest cover).
To do this, I build a geo-referenced and nationally-representative household dataset of two Sub-Saharan countries: Ethiopia and Malawi. Results show that droughts worsen income inequalities in both countries. Indeed, lower-income quantiles are subject to a higher decrease in per capita income, up to 40% for the lowest-income quantile, while higher-income quantiles were almost non-affected. These results are robust to several specifications and allow to shed quantitative light on how climate change affects inequality dynamics in developing countries​.