On Meritocratic Inequality Indices

We establish a Theorem on Structural Inequality Indices which provides fundamental link between inequality measurement and a concept of social justice embedded in meritocracy framework by taking axiomatic approach and redefining standard properties of inequality indices in a way that incorporates meritocracy, in particular equality of opportunity concept of Roemer (1998). Taking into account recent proof Benabou(2000) that meritocracy contributes positively to growth, which break the conventional trade off between equity and efficiency, the theorem provides for their connection with the theory of inequality measurement. If an index is to be both an inequality index and meritocratic it has to be of a form given in our theorem. We then propose a two-dimensional measure of meritocratic inequality index and discuss its advantages over standard Gini index and in reflecting better the nature of inequality in a society.