This paper investigate whether and how local climate warming affects urban-rural income inequality. Our empirical results reveal that a rise in Climate warming risk leads to an increase in urban-rural income inequality, which is largely unaffected by a battery of robustness checks and endogeneity concerns. The analysis of economic mechanisms shows that climate warming risk impacts urban-rural income inequality mainly by reducing the output of the primary sector. Notably, we uncover evidence that the amplifying effect of climate warming risk is not
homogeneous across the cross-section, particularly pronounced in prefectures with lower urban-rural integration and poorer rural financial services, but with high share of rural population. Overall, our research confirms the notion that climate warming risk has an important implication in shaping Chinese urban-rural income inequality.
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