Abstract
Do merit-based recruitment policies encourage individuals to climb socioeconomic ladders? We provide evidence from historical Taiwan, where elite bureaucrats were recruited through a civil service examination. Quotas for successful candidates were set based on the 1948 populations of individuals’ native provinces in mainland China, resulting in highly preferential quotas for certain groups. This system was abruptly replaced in 1962 by a uniform admissions policy. We leverage this variation to study the impacts of differential access to elite bureaucratic posts. We find that the additional incentives created by preferential quotas increased human capital accumulation and resulted in better long-run economic outcomes.
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