Sexual orientation and earnings: evidence from the ISSP

Abstract

There is a small literature suggesting for earnings differentials of nonheterosexual individuals. This study adds to this research using 1994 International Social Survey Programme data. While earnings of lesbian women and bisexual individuals are unaffected, results from selection corrected Mincer-type regressions indicate earnings penalties of about 17–20% for gay men. Oaxaca decomposition suggests that two-thirds of this differential arise from discrimination.

Notes

¹ This rather low wage penalty is an exception in this research. However, the study is based on Dutch data and, as Plug and Berkhout (2004, p. 199) point out, the Netherlands is one of the most tolerant western countries.

² See http://www.issp.org/

³ Information on Spain is available, but not included since there is no data on individuals' earnings.

⁴ While these countries quite likely differ in underlying attitudes towards homosexuality, such effects are taken into account in the regressions employing country fixed-effects.

⁵ There is further information on sexual activity in the year preceding the interview and on the number and sex of sexual partners since the respondent's 18th birthday. Indicators derived from this data yield fewer observations and are therefore not used in this analysis. However, additional regressions do not result in substantially different findings.

⁶ Descriptive statistics are available upon request.

⁷ Note that the coefficients of the control variables are mainly as expected and are therefore not discussed.

⁸ Decomposition results for females are not provided because of sample size limitations and since the estimates above are not different from zero.

⁹ Bisexual persons are dropped from the decomposition analysis.