Sexual orientation–based wage gaps in Australia: The potential role of discrimination and personality

Abstract

This article reports a research finding that lesbians in Australia earn an unexplained wage premium of 0%–13%, whereas gay men experience an unexplained negative wage gap of 8%–18%. Based on data from the Australian household panel Household Income and Labour Dynamics in Australia, the article is the first to establish these gaps in Australia, and to examine the degree to which credence can be afforded to claims that endowments such as personality traits may help explain such wage differentials. Using ordinary least squares and Blinder–Oaxaca decomposition methods, the study explicitly includes the battery of Big Five personality traits in wage regressions and estimates the contribution of endowments and returns to these traits. The finding is that personality traits and returns to them do not differ along lines of sexual orientation. Gay men in particular suffer a substantial unexplained wage penalty in the workplace. Such unexplained differences suggest that discrimination on the basis of sexual orientation, though unlawful, may exist in Australia.

Sexual orientation and earnings: a meta-analysis 2012–2020

“…Studies in meta-analysis: Ahmed et al, (2013, Aksoy at el. (2018), Bridges and Mann (2019), Bryson (2017), Carpenter and Eppink (2017), Cerf (2016), Chai andMaroto (2020), Dilmaghani (2018), Drydakis (2012), Hammarstedt et al (2015), Humpert (2016), Jepsen and Jepsen (2017), Jepsen and Jepsen (2020), La Nauze (2015), Laurent and Mihoubi (2012), Martell (2013), Mize (2016), Preston et al, (2020), Sabia (2014), Sabia (2015), Sabia et al (2017), Waite (2015), Waite et al (2020), Wang et al (2018).…”

Sexual orientation and wage discrimination: evidence from Australia

“…Whilst this is not the first study to examine the wage effects associated with sexual orientation in Australia (see Sabia et al , 2017; La Nauze, 2015; Carpenter, 2008 for earlier Australian studies), the paper nevertheless makes a number of new and important contributions. To the best of our knowledge, it is the first to document the wage relativities of non-heterosexual workers following the introduction of the Amendment Act and the first to examine whether or not there has been any wage convergence pre and post the introduction of this Act.…”

Sexual Identity, Same-Sex Relationships, and Labour Market Dynamics: New Evidence from Longitudinal Data in Australia

“…Plug et al () use data from the Australian twins registry and find, consistent with prejudiced‐based theories of discrimination against LGB workers, that sexual minorities are more likely to avoid occupations with workers who have more prejudiced attitudes (Plug et al ). Finally, La Nauze () uses data from earlier waves of the HILDA Survey, where sexual identity was not explicitly measured, and finds some evidence of a wage penalty for same‐sex cohabiting males. However, this study is not able to examine labour market outcomes for the substantial numbers of gays and lesbians without live‐in partners (Carpenter ; Sabia ), nor does it exploit the longitudinal nature of the HILDA Survey to examine earnings trajectories.…”

“…A recent meta‐analysis of these studies estimates the magnitude of the gay male/bisexual earnings penalty to be approximately 11% and the lesbian earnings premium to be 9% (Klawitter ), though there is substantial variance around these estimates. Evidence that sexual minorities may face differential treatment in the labour market has been found in the United States (Badgett ; Allegretto and Arthur ; Clain and Leppel ; Berg and Lien ; Black et al ; Blandford ; Black, Sanders, and Taylor ; Carpenter ; Cushing‐Daniels and Yeung ; Klawitter ; Sabia ), Sweden (Ahmed and Hammarstedt ; Ahmed, Andersson, and Hammarstedt ), Canada (Carpenter ), the Netherlands (Plug and Berkhout ), the United Kingdom (Arabsheibani, Marin, and Wadsworth ; Frank ; Aksoy, Carpenter, and Frank forthcoming), Greece (Drydakis ), and Australia (Carpenter ; Plug, Webbink, and Martin ; La Nauze ).…”