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Sexual orientation and full-time monthly earnings, by public and private sector: evidence from Swedish register data

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Abstract

In this paper we explore annual earnings as well as full-time monthly earnings differentials resulting from sexual orientation. We observe that gay males are at an earnings disadvantage compared to male heterosexuals regardless of which earnings measure we use. This earnings disadvantage is found to be larger when we compare gay and heterosexual males who are working full-time. In addition, the disadvantage is larger in the private than in the public sector. Lesbians, however, earn more than heterosexual females. This earnings advantage is considerably smaller when we study full-time monthly rather than annual earnings but an earnings advantage for lesbians at the top of the earnings distribution is documented regardless of which earnings measure we use. In addition, lesbians are doing better than female heterosexuals in the public sector. To sum up, the results indicate that gay males face obstacles on the labor market that hinder them from reaching top-level positions and high earnings. The earnings advantage observed for lesbians is likely to stem from the fact that lesbians devote more time to market work than heterosexual females do.

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Notes

  1. For studies from the US, see Badgett (1995), Klawitter and Flatt (1998), Allegretto and Arthur (2001), Clain and Leppel (2001), Carpenter (2004, 2005) and Zavodny (2008). For studies from European countries, see Arabsheibani et al. (2004, 2005) for the UK, Plug and Berkhout (2004) for the Netherlands, Drydakis (2011) for Greece and Ahmed and Hammarstedt (2010) and Ahmed et al. (2011a) for Sweden.

  2. See e.g. Jepsen and Jepsen (2002), Carpenter (2008), Klawitter (2008), Negrusa and Oreffice (2011) and Oreffice (2011).

  3. See Becker (1957), Phelps (1972) and Badgett (1995).

  4. For a field experiment on hiring discrimination against homosexuals, see Adam (1981) for Canada, Weichselbaumer (2003) for Austria, Drydakis (2009) for Greece and Ahmed et al. (2012) for Sweden. For field experiments on discrimination against homosexuals on the housing market, see Ahmed, Andersson and Hammarstedt (2008) and Ahmed and Hammarstedt (2009) for Sweden.

  5. See Becker (1981).

  6. See Black et al. (2007).

  7. See Antecol et al. (2008).

  8. For an overview of the male and female labour force participation rate in Sweden, the Netherlands, Greece and the United States, see Table 7 in the “Appendix”.

  9. Monthly earnings include fixed wages, fixed increments, piece wages, variable wages, unsocial hours bonus, compensation for risk and emergency duty, and weekend wage for red collars. In order to be comparable among workers with different working hours, the monthly earnings are weighted by Statistics Sweden to express full-time equivalents.

  10. The fact that lesbians who have entered civil unions have the right to get inseminated means that they have the same rights as heterosexual couples in this regard. The expenses for such treatment are covered by the national health care.

  11. For a discussion of economic motivations for entering civil unions, or registered partnerships, see Badgett et al. (2008).

  12. See Lewis (1996), Zetterberg (1994) and Zweimüller and Winter-Ebmer (1994).

  13. Homosexual individuals are less likely to have children than heterosexual individuals, see e.g. Ahmed et al. (2011a).

  14. Private employers' discrimination against homosexuals on the Swedish labour market has been found by Ahmed et al. (2012).

  15. For a more complete discussion about different explanations see, for example, Ahmed et al. (2011a) and Badgett (2006).

  16. Becker (1957) and Phelps (1972).

  17. Becker (1981) and Jepsen (2007).

  18. It is out of the scope of this article to give a full review of the large literature on earnings differences between heterosexuals and homosexuals across different countries. Many of these studies are mentioned in the introduction. For the purpose of motivation and to describe the contribution of the present study we have only cited studies conducted in Sweden. For the interested reader we recommend literature reviews by Badgett (2006) and Ahmed et al. (2011a).

  19. See Gregory and Borland (1999) for a review.

  20. Gregory and Borland (1999).

  21. Wharton (1989).

  22. Black et al. (2007) and Ahmed and Hammarstedt (2010).

  23. Black, Sanders, and Taylor (2007).

  24. Nakamura and Nakamura (1994).

  25. Self-employed individuals are excluded from the sample.

  26. Since we only have information on monthly earnings for 50 % of the individuals who are active in the private sector, we drop a large number of individuals who participate on the labour market but do not have information about monthly earnings. Table 8 in the “Appendix” give a description of the workers who have positive annual earnings but are dropped due to missing information about monthly earnings.

  27. All these results confirm what has been found in Ahmed and Hammarstedt (2010) and Ahmed et al. (2011a).

  28. See Black, Sanders and Taylor (2007).

  29. See Koenker and Basset (1978).

  30. The results from the full estimations are presented in presented in the working paper version of this paper. All estimations are available from the authors upon request.

  31. Since annual earnings are in logarithmic form, the earnings differential between gay males and heterosexual males are given by e−0.1101 − 1 = −0.1043.

  32. See Ahmed et al. (2011b).

  33. See Ahmed et al. (2012).

  34. See Ahmed et al. (2012).

  35. See Ahmed et al. (2011b).

  36. See Ahmed et al. (2011b).

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Acknowledgments

The authors are grateful for comments from three anonymous referees as well as from the editor. Further, the authors are also grateful for comments from seminar participants at the Linnaeus University Centre for Labour Market and Discrimination Studies and from participants at the workshop Sexual orientation discrimination in the labor market in Paris 2012.

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Authors and Affiliations

  1. Department of Management and Engineering, Linköping University, 581 83, Linköping, Sweden

    Ali Ahmed

  2. Swedish Collegium for Advanced Study, Thunbergsvägen 2, 752 38, Uppsala, Sweden

    Ali Ahmed

  3. Linnaeus University Centre for Labour Market and Discrimination Studies, Linnaeus University, 351 95, Växjö, Sweden

    Lina Andersson & Mats Hammarstedt

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  1. Ali Ahmed
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  2. Lina Andersson
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  3. Mats Hammarstedt
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Correspondence to Mats Hammarstedt.

Appendix

Appendix

See Tables 7, 8, 9.

Table 7 Labor force participation rate of men and women aged 15–64 years for selected countries in 2007 (%)
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Table 8 Descriptive statistics of homosexual and heterosexual individuals with positive annual earnings and missing value on monthly earnings (25–64 years of age) in 2007
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Table 9 Explanatory variables used in the OLS and quantile regressions
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Ahmed, A., Andersson, L. & Hammarstedt, M. Sexual orientation and full-time monthly earnings, by public and private sector: evidence from Swedish register data. Rev Econ Household 11, 83–108 (2013). https://doi.org/10.1007/s11150-012-9158-5

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