Meritocracy Around the Globe

Abstract: In a meritocratic society, people are rewarded based on their talents, skills, and effort rather than other factors such as demographic characteristics. The concept of meritocracy has a long-standing tradition in the social sciences and is widely believed to influence economic and social outcomes. However, empirically testing this relationship poses considerable challenges. In this paper, we use direct measures of cognitive skills from representative samples from 70 countries to examine how skills translate into income. We find that countries where cognitive skills are strongly associated with income—suggesting greater meritocracy—tend to have higher GDP per capita and lower income inequality. Conversely, countries where demographic characteristics substantially affect the returns to cognitive skills—indicating they are less meritocratic—exhibit lower GDP per capita and greater inequality.