The Costs of Meritocracy: An Agent-Based Model of Education, Inequality and Growth

Hannah Engljaehringer, Mauro Napoletano, Elisa Palagi and Andrea Roventini
Additional contact information
Hannah Engljaehringer: Institute of Economics and L'EMbeDS, Scuola Superiore Sant'Anna, Pisa, Italy
Mauro Napoletano: Université Côte d'Azur, CNRS, GREDEG, France
Elisa Palagi: Institute of Economics and L'EMbeDS, Scuola Superiore Sant'Anna, Pisa, Italy
Andrea Roventini: Institute of Economics and L'EMbeDS, Scuola Superiore Sant'Anna, Pisa, Italy

No 2026-20, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: The paper develops an agent-based model to study the complex interactions between access to education, inequality and economic growth. We simulate a “meritocratic” economy where households’ ability to obtain (costly) education affects their future productivity and, in turn, their labor compensation. Simulation results show that in an economy characterized by unequal access to education and where workers are rewarded according to their productivity, income and wealth inequality surges, social mobility falls and economic growth is gradually eroded. This shows the emerging costs of meritocracy. Conversely, an institutional framework characterized by broad educational access and less meritocratic compensation schemes can foster higher and more inclusive growth. This can also be achieved introducing a policy which subsidizes education for households at the lower end of the wealth distribution. These results underscore the critical role of institutional arrangements and pre-distributive policies in promoting both equity and long-term economic performance.

Keywords: Income inequality; Education; Meritocracy; Social mobility; Pre-distribution; Economic growth; Agent-based computational economics (search for similar items in EconPapers)
JEL-codes: C63 D31 E21 I24 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2026-09
New Economics Papers: this item is included in nep-hme
References: Add references at CitEc
Citations:

Downloads: (external link)
http://195.220.190.85/GREDEG-WP-2026-20.pdf First version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2026-20

Access Statistics for this paper

More papers in GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France Contact information at EDIRC.
Bibliographic data for series maintained by Patrice Bougette ().