Cardiovascular Consequences of Unfair Pay

Armin Falk, Ingo Menrath, Pablo Emilio Verde () and Johannes Siegrist ()
Additional contact information
Ingo Menrath: University of Duesseldorf
Pablo Emilio Verde: University of Duesseldorf
Johannes Siegrist: University of Duesseldorf

No 5720, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper investigates physiological responses to perceptions of unfair pay. 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. In this environment unfairness can arise if an agent's reward expectation is not met. Throughout the experiment we record agents' heart rate variability. Our findings provide evidence of a link between perceived unfairness and heart rate variability. The latter is an indicator of stress-related impaired cardiac autonomic control, which has been shown to predict coronary heart diseases in the long run. Establishing a causal link between unfair pay and heart rate variability therefore uncovers a mechanism of how perceptions of unfairness can adversely affect cardiovascular health. We further test potential adverse health effects of unfair pay using data from a large representative data set. Complementary to our experimental findings we find a strong and highly significant association between health outcomes, in particular cardiovascular health, and fairness of pay.

Keywords: fairness; social preferences; inequality; heart rate variability; health; experiments; SOEP (search for similar items in EconPapers)
JEL-codes: C91 D03 D63 I14 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2011-05
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-hea
References: View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://docs.iza.org/dp5720.pdf (application/pdf)

Related works:
Working Paper: Cardiovascular Consequences of Unfair Pay (2011)
Working Paper: Cardiovascular Consequences of Unfair Pay (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp5720

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().