•This study removes confound of effort and outcome in merit-based allocation.•Children prioritized effort over outcome in distributive decisions.•Children preferred to work with effort-focused peer over outcome-focused peer. How individuals determine what is fair and just when allocating resources is a fundamental aspect of moral development. Decisions about fairness involve considerations such as merit, which includes effort (one’s own exertion to achieve a goal) and outcome (one’s product). Previous research has described merit in terms of both effort and outcome (e.g., a meritorious individual is both hard-working and productive). Crucially, no research has documented whether children give priority to being hard-working (high effort) or to being productive (high outcome or product) when allocating resources. This gap in the literature obfuscates two constructs that reflect how individuals allocate resources. The current study examined this process by which children (3- to 10-year-olds, N = 100; Mage = 7.27 years, SD = 2.39) weighed these two different aspects of merit in their fairness decisions in several situations where levels of effort and outcome were varied. When there was a discrepancy between effort and outcome, children increasingly prioritized effort over outcome with age and allocated more resources to hard-working peers than to productive peers. Effort and outcome were also examined. In situations where only effort varied (i.e., outcome was controlled), with age children were more likely to incorporate effort into their fairness decisions; however, in situations where only outcome varied (i.e., effort was controlled), with age children were less likely to incorporate effort into their fairness decisions. Taken together, the findings suggest that as children get older, they increasingly focus on effort of individuals rather than on their productivity when distributing resources.