Examining the Effect of Investment, Taxation on Low-Wage Earners, and Productivity (GDP Per Capita) on Income Inequality in Germany, Greece, Ireland, Portugal, and the UK during the Period 2009-2023 Using Panel Data Analysis

This study investigates the effects of investment, taxation on low-wage earners, and productivity (measured by real GDP per capita) on income inequality in Germany, Greece, Ireland, Portugal, and the United Kingdom from 2009 to 2023. Employing panel data analysis with a fixed effects model and pooled OLS for comparison, the study uses the quintile share ratio (S80/S20) from EU-SILC as the measure of inequality. The findings indicate that productivity has a statistically significant negative impact on income inequality, whereas taxation and investment variables show no consistent effects. These results highlight the importance of structural productivity growth over fiscal or investment policy in influencing income distribution across advanced European economies.