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Sexual orientation and earnings: a register data-based approach to identify homosexuals

Abstract

This paper examines earnings differentials between homo- and heterosexual individuals by identifying sexual orientation with the help of information from register data. Register data enable us to avoid the misclassifications of sexual orientation often mentioned as a potential bias in survey-based studies. The results show that gay men are at an earnings disadvantage as compared to male heterosexuals while the earnings differential between lesbians and heterosexual women is very small. Our results are in line with results from previous research but are more reliable since we use a more reliable measure of sexual orientation than previous research.

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Notes

  1. See Badgett (2006) for an excellent review of these studies.

  2. Homosexual women living in civil unions also have the right to get inseminated or undergo in vitro fertilization at a Swedish medical service center.

  3. The comparison group of married heterosexuals only includes legally married couples. Thus, the sample does not include unmarried cohabiting couples.

  4. Our data do not allow us to combine the individuals to households.

  5. The exchange rate USD/SEK was about 7.90 while the exchange rate EUR/SEK was about 10.90 in June 2009.

  6. Since our data do not allow us to combine the individuals to households, we are not able to run regressions on household joint earnings.

  7. The basic amount is fixed annually by the Swedish Government. Among other things, the basic amount is used to determine the threshold for when individuals start paying taxes. The basic amount is also used to determine pensions, sickness allowances and other social benefits in Sweden. The basic amount according to the National Insurance Act was 38,600 SEK in 2003.

  8. Since yearly earnings are in logarithmic form, the earnings differential between homo- and heterosexuals are given by e  − 0.171 − 1 = − 0.157 and e  − 0.353 − 1 = − 0.297, respectively.

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Acknowledgements

We wish to thank the seminar participants at Gothenburg University, Stockholm University, Växjö University and the 2008 EALE conference in Amsterdam. Furthermore, we would like to thank the editor James Albrecht and two anonymous reviewers for their helpful comments and suggestions. We would also like to thank Joel Karlsson for his assistance with the data. Ali Ahmed appreciates the financial support from the Wallander-Hedelius Foundation.

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Correspondence to Ali M. Ahmed.

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Responsible editor: James Albrecht

Appendix

Appendix

Table 5 Dependent and explanatory variables used in the earnings functions

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Ahmed, A.M., Hammarstedt, M. Sexual orientation and earnings: a register data-based approach to identify homosexuals. J Popul Econ 23, 835–849 (2010). https://doi.org/10.1007/s00148-009-0265-4

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Keywords

  • Sexual orientation
  • Labour market
  • Earnings

JEL Classification

  • J15
  • J71