TY - JOUR
T1 - Meritocracy and the inheritance of advantage
AU - Comerford, David
AU - Rodríguez Mora, José V.
AU - Watts, Michael J.
PY - 2022/6
Y1 - 2022/6
N2 - We present a model where more accurate information on the background of individuals facilitates statistical discrimination, increasing inequality and intergenerational persistence in income. Surprisingly, more accurate information on the actual capabilities of workers leads to the same result - firms give increased weight to the more accurate information, increasing inequality, which itself fosters discrimination. The rich take advantage of this through educational investments in their children, and mobility decreases as a consequence of an increase in the ability to reward talent. Using our model to interpret the data suggests that a country like the US might indeed be a land of opportunity for the sufficiently able, as conditional on ability background may have relativelylittle effect. Nevertheless the US has a relatively low degree of intergenerational mobility precisely because meritocracy facilitates a high correlation of ability with background.
AB - We present a model where more accurate information on the background of individuals facilitates statistical discrimination, increasing inequality and intergenerational persistence in income. Surprisingly, more accurate information on the actual capabilities of workers leads to the same result - firms give increased weight to the more accurate information, increasing inequality, which itself fosters discrimination. The rich take advantage of this through educational investments in their children, and mobility decreases as a consequence of an increase in the ability to reward talent. Using our model to interpret the data suggests that a country like the US might indeed be a land of opportunity for the sufficiently able, as conditional on ability background may have relativelylittle effect. Nevertheless the US has a relatively low degree of intergenerational mobility precisely because meritocracy facilitates a high correlation of ability with background.
KW - social mobility
KW - human capital
KW - statistical discrimination
U2 - 10.1007/s10887-021-09201-1
DO - 10.1007/s10887-021-09201-1
M3 - Article
SN - 1381-4338
VL - 27
SP - 235
EP - 272
JO - Journal of Economic Growth
JF - Journal of Economic Growth
IS - 2
ER -