Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/106192
Authors: 
Falk, Armin
Kosse, Fabian
Menrath, Ingo
Verde, Pablo Emilio
Siegrist, Johannes
Year of Publication: 
2014
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 715
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.
Subjects: 
fairness
social preferences
inequality
heart rate variability
health
experiments
SOEP
JEL: 
D91
D03
D63
I14
Document Type: 
Working Paper

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