How 3‐ to 11‐year‐old children integrate recipients' merit and social status when allocating resources was examined in 2021 and 2022. Study 1 (Han Chinese, n = 309, 150 girls) showed that while children prioritized merit, they developed from favoring high‐status recipients to favoring low‐status recipients. Study 2 (n = 194, 98 girls) and Study 3 (n = 138, 68 girls) revealed that children held stereotypes about the relation between merit and social status which shifted with age from expecting high‐status peers to expecting low‐status peers to work harder, these expectations corresponded allocation decisions. These findings suggest children shift from perpetuating to rectifying inequity and changing stereotypes about people of different social status may serve an important function in the process.