Abstract: Proponents of meritocracy argue that hiring should be based solely on merit. I show that non-merit attributes that are independent of and uninformative about worker merit can nonetheless improve the average merit of hired workers. When such attributes are informative about workers' willingness to apply, hiring policies can be used to encourage applications from individuals who may not apply otherwise. This force leads to merit-optimal policies that resemble affirmative action or other forms of attribute-based selection.
Abstract: In hiring and other selection processes, being selected can provide information to workers about their value for acceptance. When the worker's value for working depends on firms' private value for the worker, the firm faces a tradeoff between increasing offer rates with less selective policy and improving the signal that selection sends about value with more selective policy. This tradeoff pushes the firm toward more selective policy. This additional selectivity can potentially increase both worker and firm utility, with artificially decreased selectivity potentially making all parties worse off.
Abstract: Theoretical models suggest qualitatively similar outcomes between merit-optimal selection rules that and those driven by preferences for non-merit characteristics. This paper uses a lab experiment to restrict both explicit and implicit incentives to only merit. The experiment asks participants to make decisions that are theoretically equivalent to a hiring decision, where use of non-merit characteristics would provide evidence for the theoretically predicted forces. Participants additionally make application choices as workers, testing the underlying assumptions of the theoretical model.