Is climate change slowing the urban escalator out of poverty? evidence from Chile, Colombia, and Indonesia

While urbanization has great potential to facilitate poverty reduction, climate shocks represent a looming threat to such upward mobility. This paper empirically analyses the effects of climate risks on the function of urban agglomerations to support poor households to escape from poverty. Combining household surveys with climatic datasets, the panel regression analysis for Chile, Colombia, and Indonesia finds that households in large metropolitan areas are more likely to escape from poverty, indicating better access to economic opportunities in those areas. However, the climate shocks offset such benefits of urban agglomerations, as extreme rainfalls and high flood risks significantly reduce the chance of upward mobility. The findings underscore the need to enhance resilience among the urban poor to allow them to fully utilize the benefits of urban agglomerations.