Scholars argue the dominant discourse of meritocracy legitimises intergenerational inequality and the winner–loser divide. However, is our society really meritocratic? If yes, the relative power of educational qualifications per se should be smaller than that of skills/abilities in the labour market. Using the standardised data in the United States, structural equation modelling shows (1) the contribution of family background to educational attainment is as large as that to skills acquisition; but (2) the economic return to education is substantially larger than that to skills; and consequently (3) the role of education outweighs that of skills in forming social stratification. This suggests that contemporary USA is a typical credential society, where credentialism prevails over skills-based meritocracy. Nonetheless, people may misbelieve the society is meritocratic – imagined meritocracy – by conflating the levels/influences of education and skills. It is essential to distinguish these two traits and understand the credential/meritocratic nature of our society.
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