Inequality of Opportunity, Social Mobility, and Life Satisfaction: A Comparative Analysis among Welfare Regimes

This study investigates how inequality of opportunity (IOp) and perceived social mobility (PSM) affect life satisfaction (LSat) across seven European welfare regime clusters, including a novel classification of the Western Balkans as a distinct post-communist regime. Drawing on the 2016 European Quality of Life Survey, we apply a two-level linear mixed-effects model to estimate income decompositions and psychological outcomes, accounting for the nested structure of individuals within cities and countries. The analysis employs both Gini and mean log deviation (MLD) estimators to capture IOp and validate robustness. Findings confirm that circumstances beyond individual control—such as socio-economic background, rural residence, and housing deprivation—exert significant effects on income, especially in regimes marked by institutional fragmentation. IOp negatively predicts life satisfaction in all post-communist and Southern European regimes, while this association is statistically insignificant in liberal and social-democratic clusters, highlighting the buffering role of redistributive institutions. Crucially, PSM emerges as a strong and consistent positive predictor of well-being across all regimes, suggesting that belief in future mobility can partially offset the psychological toll of structural disadvantage. The Western Balkans exhibit the strongest negative association between IOp and LSat and the highest contextual variance, reinforcing the compounding effects of weak institutions and constrained opportunity. By integrating objective inequality with subjective mobility perceptions, this study contributes to a growing literature linking fairness, trust, and well-being. The findings offer actionable implications for inequality monitoring and welfare reform, especially in transition economies where optimism and opportunity remain structurally misaligned. Efforts to reduce IOp and foster credible mobility pathways are essential not only for economic cohesion but for enhancing subjective well-being and democratic resilience in Europe’s most vulnerable welfare regimes.