Abstract
The organizational sciences have long been interested in the effects of various compensation strategies, and on enhancing employee health. Research examining the connection between pay and health, however, remains a relative rarity. The work that has been done is scattered across disparate disciplines and lacks a unified framework for systematically exploring the effects of pay on health. We argue that greater insecurity at work, as well as rising discontent over wages and work conditions, necessitates a richer understanding of the ways in which organizational pay affects employee psychological, physiological, and behavioral health. We first conduct a comprehensive review of existing research across a broad range of disciplines, taking note of the different ways that pay is conceptualized and the impact it has on employee health. We identify critical knowledge gaps in why and when pay is related to health, noting several disciplinary trends. Drawing on prominent theories of occupational health, we then build a theoretical framework that illustrates three mechanisms underlying the effect of pay on health. We further advance prior work by integrating allostatic load theory to explain how pay gets “under the skin” to affect health, while also identifying relevant moderators and boundary conditions. Taken together, our review integrates findings from a variety of disciplines and facilitates knowledge building across these fields to generate a more comprehensive understanding of the connection between pay and health. (PsycInfo Database Record (c) 2023 APA, all rights reserved)