This paper examines the relationship between inequality and happiness in the United States and Europe, using survey data from 123,668 individuals. The authors find that individuals report lower happiness when inequality is high, even after controlling for income, personal characteristics, and macroeconomic factors. However, the effect is stronger in Europe than in the US. In Europe, the poor and those on the left of the political spectrum are particularly unhappy about inequality, while in the US, the happiness of the poor and those on the left is not correlated with inequality. Interestingly, in the US, it is the rich who are most bothered by inequality. The authors argue that these findings reflect different perceptions of social mobility in the two regions: Americans believe their society is more mobile, where individual effort can move people up and down the income ladder, while Europeans perceive their society as less mobile, making the poor feel "stuck" and the rich fear falling behind. These perceptions influence how individuals value redistributive policies, with Europeans favoring more redistributive welfare states.This paper examines the relationship between inequality and happiness in the United States and Europe, using survey data from 123,668 individuals. The authors find that individuals report lower happiness when inequality is high, even after controlling for income, personal characteristics, and macroeconomic factors. However, the effect is stronger in Europe than in the US. In Europe, the poor and those on the left of the political spectrum are particularly unhappy about inequality, while in the US, the happiness of the poor and those on the left is not correlated with inequality. Interestingly, in the US, it is the rich who are most bothered by inequality. The authors argue that these findings reflect different perceptions of social mobility in the two regions: Americans believe their society is more mobile, where individual effort can move people up and down the income ladder, while Europeans perceive their society as less mobile, making the poor feel "stuck" and the rich fear falling behind. These perceptions influence how individuals value redistributive policies, with Europeans favoring more redistributive welfare states.