Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper examines the impact of inequality and redistribution on economic growth in the EU. While past research finds inequality harms long-term growth, the effects of redistribution remain debated. Using panel data from 25 EU countries (2007–2019), we introduce the Net Benefit Share as a measure for targeted redistribution. Our findings show that market inequality boosts short-term growth, but redistribution targeted to low-income households further enhances it mainly via the consumption channel. In contrast, redistribution to high-income earners and pensioners reduces growth. These results highlight the importance of well-targeted redistributive policies for economic performance.