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Sexual Orientation, Unemployment and Participation: Are Gays Less Employable than Straights?

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Abstract

This paper is the first attempt to assess, in a unified econometric framework, the existence and the magnitude of both the sexual orientation participation gap and the sexual orientation unemployment gap. Having identified male same-sex couples using the Employment Survey, we use a bivariate probit selection model where the labor supply and the employment equation are jointly estimated for the French labor market. The results show that both participation and employment probabilities are significantly lower for gay employees compared to their heterosexual counterparts. Further investigations indicate that young gay workers, particularly, are more exposed to the unemployment risk than older ones. The beginning of a professional career and the subsequent entry to the labor market appear to be difficult steps to overcome for gay workers who spend more time than their heterosexual counterparts to find the good job.

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Notes

  1. If as it is noticed by Tilcsik (2011), self-reports or complaint rates do not necessarily represent the actual incidence of discrimination, there is no doubt that they can be seen at least as indicators of a potential problem.

  2. The relationship between unemployment and well-being is studied in Van der Meer (2014), while the specific impact of discrimination on the well-being of LGBT people is documented in Sears and Mallory (2011)

  3. Badgett et al. (2007) points out that when surveyed 8 % to 17 % of LGBT people report having been fired − or denied employment − because of their sexual orientation. Drydakis (2009) and Drydakis (2011), highlight that gays and lesbians face lower access to occupations in Greece. Section 1.3 thereafter provides a complete overview of the main results obtained concerning employment discrimination based on sexual orientation.

  4. As noticed by Leppel (2008) wage discrimination affects unemployment indirectly: lower wages received by gay employees reduces the incentive to work and thus (i) the labor force participation; (ii) for people in the labor force, their endogenous job search effort which increases the probability of unemployment.

  5. The first two points refers to a taste for discrimination ; originally developed by Becker (1957), this approach relies directly on a “disaffection” with the gay identity and/or the homosexual lifestyle, leading to a strict preference for discrimination. The third point refers to the theory of statistical discrimination originally developed by Phelps (1972) and Arrow (1973). See, for example, Drydakis (2014), section 3, for a presentation of these two types of discrimination.

  6. Leonard (1985) underlined that one of the manifestations of the public fear surrounding AIDS victims is employment discrimination against persons with AIDS, persons perceived as having AIDS and persons who are members of publicly identified “risk groups” such as gay people. Vest et al. (2006) highlights that a possible explanation of differences in termination rates between homosexual and heterosexual employees relies on the managers’ fear of AIDS and their beliefs about employees with AIDS ability to perform their job. They provide strong support that fear of AIDS as well as expectancies about disruptions in the workplace and reductions in revenue were related significantly to likelihood of firing employee with AIDS.

  7. The « Corporate Leavers Survey » of the Level Playing Field Institute, conducted in 2007 − devoted to an in-depth look at (i) the effect of unfairness upon an employee’s decision to leave his employer, (ii) the financial cost to employers due to voluntary turnover based on unfairness − estimated that employees’ turnover due to workplace discrimination costs U.S. employers $64 billion on an annual basis.

  8. See Horvath and Ryan (2003), Weichselbaumer (2004).

  9. Gay men are commonly stereotyped as feminine or effeminate (Madon (1997)), while lesbians are often believed to be overly masculine (Ward (2009)).

  10. Exploring employment discrimination against LGBT Utahns Rosky et al. (2011) highlight a very crucial point: LGB respondents seem to have experienced consistent percentages of discrimination in the workplace regardless how open they are about their sexual orientation or gender identity in the workplace. This finding shows that discrimination based on sexual orientation may occur even when employees do not disclose their sexual orientation in the workplace.

  11. IPSOS survey conducted in 2004 for the newspaper Têtu, on a national sample of 1002 persons, representative of the French population over 15 years of age.

  12. Employees who believe that they suffer discrimination may misperceive the motives of their employers, perceiving discrimination when none existed or, on the other hand, underestimating the actual discrimination.

  13. Furthermore, exploring differences in responses to gay applicants by employer gender, the paper highlights that males discriminate more than females.

  14. The author submitted a total of 3538 resumes, responding to 1769 job postings by private employers. The sample included jobs in five occupations and seven states. The five occupations in the sample were managers, business and financial analysts, sales representatives, customer service representatives, and administrative assistants. The sampled states included four states in the Northeast and the West (New York, Pennsylvania, California, Nevada) and three states in the Midwest and the South (Ohio, Florida, Texas), all with a relatively high number of job postings on the recruitment websites used. The number of job postings in a state ranged from 131 (Nevada) to 347 (Florida), with at least 200 observations in each state other than Nevada.

  15. As underlined by Badgett et al. (2007) participation in a gay organization, for example, might be associated with progressive, liberal, or leftist political views and observed differences in callbacks may thus be attributable to discrimination based on either sexual orientation or political affiliation: it is impossible to determine the net effect of sexual orientation.

  16. A symmetrical result holds for women. Lesbians supply more labor and are more likely to be employed full-time than their heterosexual counterparts. See Antecol and Steinberger (2009) for a more detailed study on female labor supply differences by sexual orientation.

  17. The Employment Survey is the French equivalent of the US Current Population Survey (CPS). The purpose of the survey (annual before 2003 and quarterly since 2003) is to observe both the structural and economic situation of people in the French employment market. It forms part of the Labor Force Surveys defined by the European Union. This is the only source that provides a measurement for the concepts of activity, unemployment, employment and inactivity as defined by the International Labour Organization (ILO). Questions cover employment, unemployment, social origin, wages, family situations, qualifications, education, hours worked, location etc. See. http://www.insee.fr/en/methodes/default.asp?page=sources/ope-enq-emploi-continu.htm and http://idsc.iza.org/metadata/PDF/762.pdf?PHPSESSID=556e6b4432dfeeebae1c8bfa39f20371.

  18. For a complete and detailed presentation of the identification process of homosexuals by using the Employment Survey, see Laurent and Mihoubi (2012), section 2.3.

  19. The threshold value of 1000€ has been indexed in accordance with the evolution of the average wage. As the French Employment Survey does not provide any information about non-wage incomes, a lump-sum income of 300 €/month, corresponding to a reservation income, has been attributed to inactive members of the couples. Similarly, a lump-sum income of 1000€/month has been attributed to independent workers.

  20. Throughout this article, we use the terms “male homosexuals” or gays to denote the members of our sample of same-sex couples.

  21. Survey on Sexual Behavior in France (ACSF), conducted in 1992 (cf. Les comportements sexuels en France, Spira A., Bajos N. and the ACSF team, La Documentation Française, Paris, 1993).

  22. To be compared to +7.3 % in Drydakis (2012)

  23. In an imperfect information framework such a difference could be explained by a strategic behavior of gay employees, to prevent their employers from accumulating over time a sufficient amount of information, leading to the revelation of their sexual orientation.

  24. The differences in the situation on the labor market for the individual and the partner in same sex couples is related to the fact that about 10 % of the same-sex couples sample contains only one member of the couple.

  25. Note that the cause of the selection bias is not the consequence of having a non-random sample, but arises merely because individuals whose observable characteristics are unfavorable have a large error term in the selection equation

  26. The computation of the marginal effects and their variance-covariance matrix on survey Data is available on request (cf. Mihoubi (2014))

  27. Laurent and Mihoubi (2012) notice that, as same-sex marriage was not allowed in France at that time, the marriage premium could logically be added to such an estimation, leading to estimate an upper bound for the unemployment probability gap between gays and straight men. Here, the marriage premium measured with the marginal effect associated to the married variable range from +1.16 pp. (narrow definition of unemployment) to +1.56 pp. (broad definition). We would thus get an upper bound for the unemployment gap between gays and straights equal to +2.74 pp. with the narrow definition of unemployment vs. +3.14 pp. with the broad definition.

  28. It is worth noting that the upper bound for the unemployment probability gap is much higher in France (+2.74 pp. to +3.15 pp) than in the US (+1.3 pp).

  29. The absence of degrees has a negative impact on the employment probability. The magnitude of the negative impact decreases with age (interaction term between age and “no degree” equal to 0.03 pp). For older workers, the fact that they do not hold any degree is less stigmatizing than for younger workers.

  30. This negative impact may be related to a higher initial endowment with a skilled or highly skilled father, diminishing the intensity of job search for an unemployed worker.

  31. The delta method used to compute the variance of the estimates and the marginal effects is based on a linear approximation of the model. Because our model is very non-linear, we check the robustness of the delta method using an alternative computation of the variances of the estimates and the marginal effects based on a bootstrap method, which does not require any linear approximation but is much more expensive in computational time.

  32. The marginal effect of past unemployment on employment probability is however reduced: 60 pp. instead of 80 pp. with the direct estimation strategy.

  33. Laurent and Mihoubi (2012) have found strong evidence of a wage discrimination against gays on the French labor market

  34. Contrary to heterosexual couples where the domestic tasks are usually performed by women, such a specialization is not working in male same-sex couples. As a consequence, members of a gay couple participate more than heterosexual men in domestic task and thus may reduce their labor force participation.

  35. This econometric issue does not arise when working, for example, on gender discrimination because the two members of a couple cannot belong to the same sample: one member belongs to the female sample while the other is in the male sample.

  36. The positive correlation between unemployment end homeowner status observed at the macro level Oswald (1996), has been refuted when controlling for the unobserved heterogeneity and for potential endogeneity between residential status and labor market situation.

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Acknowledgments

The authors would like to thank an anonymous referee for his helpful comments and suggestions.

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Authors and Affiliations

  1. Department of Economics, Center for Economic Policy Studies (EPEE), University Evry-Val d’Essonne, 4 bd. François Mitterrand, 91025, Evry cedex, France

    Thierry Laurent

  2. Department of Economics, ERUDITE, University Paris-Est Créteil, 61 avenue du Général de Gaulle, 94010, Créteil cedex, France

    Ferhat Mihoubi

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  1. Thierry Laurent
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  2. Ferhat Mihoubi
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Correspondence to Thierry Laurent.

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This research has been conducted as part of the project Labex MME-DII (ANR11-LBX-0023-01).

Appendix: Variables used in the Selection and Wage Equations

Appendix: Variables used in the Selection and Wage Equations

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Laurent, T., Mihoubi, F. Sexual Orientation, Unemployment and Participation: Are Gays Less Employable than Straights?. J Labor Res 38, 1–44 (2017). https://doi.org/10.1007/s12122-016-9237-0

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