Unfair Pay and Health

Armin Falk, Fabian Kosse, Ingo Menrath, Pablo Emilio Verde and Johannes Siegrist

No 715, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: This paper investigates physiological responses to perceptions of unfair pay. We use an integrated approach exploiting complementarities between controlled lab and representative field 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 has been shown to predict coronary heart diseases in the long-run. Using three measures of perceived unfairness 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 data from a large representative data set. The analysis includes cross-sectional and dynamic panel estimations. Complementary to our experimental findings we find a strong and highly significant negative association between health outcomes, in particular cardiovascular health, and the perception of unfair pay.

Keywords: Fairness; social preferences; inequality; heart rate variability; health; experiments; SOEP (search for similar items in EconPapers)
JEL-codes: D03 D63 D91 I14 (search for similar items in EconPapers)
Pages: 25 p.
Date: 2014
New Economics Papers: this item is included in nep-exp, nep-hea and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.492476.de/diw_sp0715.pdf (application/pdf)

Related works:
Working Paper: Unfair Pay and Health (2018)
Working Paper: Unfair Pay and Health (2016)
Working Paper: Unfair Pay and Health (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp715

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