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Unfair Pay and Health

Author

Listed:
  • Falk, Armin
  • Kosse, Fabian
  • Menrath, Ingo
  • Verde, Pablo E.
  • Siegrist, Johannes

Abstract

This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach that exploits complementarities between controlled laboratory and representative panel data. In a simple principal-agent experiment, agents produce revenue by working on a tedious task. Principals decide how this revenue is allocated between themselves and their agents. Throughout the experiment we record agents' heart rate variability, which is an indicator of stress-related impaired cardiac autonomic control and which has been shown to predict coronary heart disease in the long run. Our findings establish a link between unfair payment and heart rate variability. Building on these findings, we further test for potential adverse health effects of unfair pay using observational data from a large representative panel data set. Complementary to our experimental findings we show a strong and significant negative association between unfair pay and health outcomes, in particular cardiovascular health.

Suggested Citation

  • Falk, Armin & Kosse, Fabian & Menrath, Ingo & Verde, Pablo E. & Siegrist, Johannes, 2018. "Unfair Pay and Health," Munich Reprints in Economics 68611, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:68611
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    Cited by:

    1. Christian Pfeifer, 2015. "UnfairWage Perceptions and Sleep: Evidence from German Survey Data," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 135(4), pages 413-428.
    2. Helena Manger, 2025. "Benefits and Employees’ Work Effort: An Empirical Analysis of Non-monetary Incentives," SOEPpapers on Multidisciplinary Panel Data Research 1228, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. D'Ambrosio, Conchita & Clark, Andrew E. & Barazzetta, Marta, 2018. "Unfairness at work: Well-being and quits," Labour Economics, Elsevier, vol. 51(C), pages 307-316.
    4. Beckmann, Michael & Grunau, Philipp & Kretschmer, Tobias & Shvartsman, Elena, 2025. "Does High Involvement Management Drive Affective Commitment? Causal Tests on System Coherence and Complementarity," IZA Discussion Papers 18047, IZA Network @ LISER.

    More about this item

    Keywords

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    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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