The moral concern for fairness is a core element of social life throughout the lifespan. Concerns about fairness arise in multiple contexts, and one very salient context is the allocation of resources. Understanding the harmful consequences of unfair resource allocations, for example, is essential to ensuring social harmony and protecting the welfare of all individuals. This study investigated how 3- to 8-year-old children (N = 176) perceived of, and responded to, resource inequalities based on their status within the inequality (advantaged or disadvantaged) and whether the allocation was based on differences in individual merit or gender biases. Across a range of assessments, the present study documented how children’s status within individual and gender based inequalities had a profound influence on how they perceived a context of resource inequality.

Children’s status and the type of inequality were related to their perceptions of the inequality in several ways. Children who were disadvantaged by an inequality judged it to be more unfair than children who were advantaged by it. However, both advantaged and disadvantaged children judged gender based allocations to be more unfair than individually based inequalities. Further, children who were advantaged by the inequality were more likely to support redistributing the resources when they expected that a fellow – advantaged – ingroup member initiated the redistribution. Finally, children were more likely to rectify a gender based inequality than an individual one, whereas they were more likely to perpetuate an individual inequality than a gender based one.

Children’s intra- and intergroup attitudes and inclusion decisions were also related to their status and the type of inequality that they experienced. Although children were more favorable towards gender ingroup than outgroup members, with age, children preferentially included gender outgroup peers that performed well at the activities.

Evidence was also found to support the argument that children’s experiences with resource inequalities are related to their conceptions of fairness in subsequent contexts.  Children who were personally disadvantaged by an inequality evaluated rectifying a separate, third-person, inequality more favorably and were also more likely to rectify the third-person inequality.

Finally, children’s ToM competence was revealed as an important developmental mechanism for children’s developing conceptions of fairness. Children with a more advanced understanding of others’ mental states judged rectifying gender based inequalities more positively and were more likely to include gender outgroup peers who performed well at the activities (controlling for age). Interestingly, children’s status within the inequality was also related to their ToM performance. Children who were advantaged by the inequality were less likely to pass subsequent ToM assessments compared to those who were disadvantaged by the inequality.

Overall, results provide novel insights into children’s developing conceptions of fairness. Specifically, results detail the critical role of children’s perspective within a context in their perceptions of, and responses to, the context. Results also have implications for fostering positive intergroup relationships, improving children’s concern for rectifying first and third-person inequalities, and for our understanding of how children’s position within a context relates to their ability to understand others’ mental states.