This IMF Working Paper examines the distributional effects of natural disasters on income inequality within countries. The authors identify channels through which disasters may affect inequality and analyze data from advanced and emerging economies. They find that severe disasters in advanced economies lead to an increase in inequality, while multiple disasters in a year or disasters associated with growth slowdowns can also increase inequality in both advanced and emerging economies. The study provides important insights for policymakers on how to mitigate the negative impacts of natural disasters on income inequality.
