The impact of energy security on income inequality: The key role of economic development

While the literature has studied various factors affecting income inequality and the influence of energy security on the economy, knowledge is rather limited regarding the linkage between energy security and income inequality. Based on six indicators that capture four aspects of energy security including availability, accessibility, develop-ability, and acceptability, this research applies the dynamic panel threshold approach to explore whether they affect income distribution via global panel data of 68 countries over 2001–2018. The results support inverted U-shape impacts of energy security on income inequality with an improvement of economic development. Specifically, energy security tends to deteriorate income distribution in the early stages of economic development, while it improves income distribution upon reaching a certain level of development. Evidence also reveals that income inequality has a persistence effect over time. Previous income inequality enhances current inequality in a regime with low economic development, while this effect runs opposite in a regime with high development. These findings thus provide valuable implications to policymakers.