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We argue that in important circumstances meritocracy can be realized only through a specific form of affirmative action we call affirmative meritocracy. These circumstances arise because common measures of academic performance systematically underestimate the intellectual ability and potential of members of negatively stereotyped groups (e.g., non-Asian ethnic minorities, women in quantitative fields). This bias results not from the content of performance measures but from common contexts in which performance measures are assessed—from psychological threats like stereotype threat that are pervasive in academic settings, and which undermine the performance of people from negatively stereotyped groups. To overcome this bias, school and work settings should be changed to reduce stereotype threat. In such environments, admitting or hiring more members of devalued groups would promote meritocracy, diversity, and organizational performance. Evidence for this bias, its causes, magnitude, remedies, and implications for social policy and for law are discussed.