Meritocracy in the Face of Group Inequality

Abstract

Meritocratic systems are commonly understood as those that assign tasks to individuals who can best perform them. But future performance cannot be known prior to assignment, and must be inferred from other traits. We consider a model in which performance depends on two attributes---ability and training---where ability is endowed and unobserved and training is acquired and observed. The potential to acquire training depends on ability and resource access, so ability affects performance through two channels: indirectly through training and directly through the performance function. The population consists of two groups, each with the same ability distribution, but with differential access to resources. We show that performance-maximizing allocations are not generally strictly monotonic (in scores) or group-blind. This is true even when individuals can underreport scores or underinvest in training, and when commitment to selection policies is possible.