Inequality of Opportunity, Social Mobility, and Life Satisfaction: A Comparative Analysis of Western Balkans and European Welfare Regimes

This study examines the relationship between inequality of opportunity, social mobility, and life satisfaction with a novel classification of seven European welfare regimes. This classification includes the Western Balkans as a distinct standalone cluster, reflecting the region's prolonged EU integration process and unique socio-economic challenges. Using data from the 2016 European Quality of Life Survey, we employ a two-level linear mixed-effects model to account for the nested structure of the data. Our analysis decomposes income inequality into components attributable to circumstances beyond individual control and personal effort, enabling an in-depth examination of the direct and mediating effects of inequality of opportunity on life satisfaction. The findings reveal that inequality of opportunity has a significant and negative impact on life satisfaction, particularly in countries characterised by systemic disparities and limited upward mobility, such as those in the post-communist Western Balkans regime. By contrast, social democratic regimes demonstrate resilience to these effects, supported by robust redistributive policies. Furthermore, the study underscores the critical role of perceived social mobility in shaping life satisfaction, highlighting its compensatory effect in contexts of structural inequity. This research contributes to the discourse on socio-economic inequality and well-being by integrating a refined comparative analysis of welfare regimes with the study of life satisfaction. It underscores the necessity of policy interventions that foster equal opportunities and social mobility, particularly in regions such as the Western Balkans, where institutional fragility and economic disparity persist. The findings offer actionable insights for designing welfare strategies that balance meritocratic principles with social justice across diverse European contexts.