The Earnings Effects of Sexual Orientation

Abstract

This investigation of the effect of sexual orientation on earnings employs General Social Survey data from 1989–96. Depending largely on the definition of sexual orientation used, earnings are estimated as having been between 14% and 16% lower for gay men than for heterosexual men, and between 20% and 34% higher for lesbian women than for heterosexual women. This evidence, the authors suggest, is consistent with either of two complementary constructions: Gary Becker's argument that male/female earnings differentials are rooted in specialization within households and in optimal human capital accumulation decisions individuals make when they are young; and Claudia Goldin's observations about marriage-based gender discrimination, according to which the paternalistic “protection” of wives and mothers from the world of work has tended to overlook lesbians.

Is there a ‘marriage premium’ for gay men?

“…This research fairly consistently concludes that gay men earn substantially less than other men with similar observable attributes in the U.S. (e.g., Badgett, 1995;Berg and Lien, 2002;Black et al, 2003;Carpenter, 2007a). 6 Researchers differ on the causes of this earnings gap, with, for example, some attributing it to sexual orientation discrimination (e.g., Badgett, 1995) and others to gays clustering in traditionally-female occupations (e.g., Blandford, 2003).…”

“…These two surveys include information about labor market outcomes as well as information about sexual identification or the gender of sexual partners. Despite their relatively small sample sizes, they have been widely used to examine earnings among gays and lesbians because they are among the few surveys that provide information about sexual partners (e.g., Badgett, 1995;Berg and Lien, 2002;Black et al, 2003;Blandford, 2003). 8 The GSS was conducted annually from 1972 to 1994 (except not in 1979, 1981, or 1992) and every other year since 1994.…”

“…7 Another potential explanation is differences in unobserved labor-market traits. As Black et al (2003) discuss, gay men may devote fewer resources to accumulating human capital and making other career-related investments because these men do not expect to form a traditional household with one partner specializing in market production and the other specializing in nonmarket production. Because most gay men may not expect to support a partner and children, they may have less incentive to focus on human capital accumulation and market production.…”

Sexual orientation discrimination in hiring

“…It is conceivable that men who are successful in the marriage market possess characteristics which are equally valued in the labor market. Black et al (2001) report that men with no sexual activity (particularly over a longer time period) obtain substantially lower earnings, which indicates that men who have no sexual partners are equally unattractive in the labor market. Nevertheless, no effect of sexual activity on female wages has been found.…”

“…When the regression sample was limited to full-time, fullyear workers, only small differences in incomes were found for lesbians as compared to married women, and these differences lacked significance. Black et al (2001) re-examined Badgett's original results by the use of pooled, crosssectional data from the 1989-96 GSS with different classifications for sexual orientation.…”