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Sexual Orientation and Wage Discrimination in France: The Hidden Side of the Rainbow

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Abstract

This article is the first study to present an econometric evaluation of wage discrimination based on sexual orientation in the French labor market. Having identified same-sex couples using the French Employment Survey, we estimate the wage gap related to sexual orientation in the private and public sectors, in order to analyze whether or not lesbians and gays suffer a wage penalty. The results obtained show the existence of a wage penalty for homosexual male workers, as compared with their heterosexual counterparts, in both the private and public sectors; the magnitude of this discrimination varies from about −6.5 % in the private sector, to −5.5 % in the public sector. In the private sector, the wage penalty suffered by gay employees is higher for skilled workers than for the unskilled, and—in both sectors—the wage penalty is higher for older workers than for younger ones. As with many other countries, we do not find any evidence of the existence of a wage discrimination against lesbians.

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Notes

  1. See Badgett (2006) for a survey of this literature.

  2. If a significant proportion of heterosexual employees is homophobic, hiring homosexual workers can lead to a decrease in individual productivity of both homosexuals (harassment, depression, lack of motivation, etc.) and heterosexuals (lack of concentration, lost time, etc.).

  3. Oaxaca (1973), in his seminal study on gender wage discrimination, shows that the share of the gender wage gap due to discrimination, decreases from 77 % to 58 % when controlling for industry and occupation.

  4. If the probability of accessing executive positions is lower for homosexuals than for heterosexuals with identical characteristics, but once gays and lesbians become executives they are paid the same, (i) the proportion of gay or lesbian employees among executives will be low (gay glass ceiling) and thus the average wage will be lower for homosexual employees than for heterosexual ones, but (ii) a wage discrimination based on sexual orientation will appear, only if the variable “Executive position vs. non-executive position” is not used as a control variable in the wage equation.

  5. This point is also emphasized by Carpenter (2004)

  6. In a discrimination and signaling framework, it can be profitable for heterosexual workers, in order to obtain higher wages, to use marriage as a signal of heterosexuality (Carpenter 2005b, 2007b; Frank 2006).

  7. This measurement error can however be reduced by filtering populations of cohabitants on the basis of various criteria: age (to eliminate juvenile cohabitation), family links, income (economic cohabitation), nationality (to exclude migrant workers), etc. Several articles show, that identifying homosexual populations via a cohabitation criterion is precise and efficient (see Black et al. 2000; Carpenter 2004) and that the bias associated with this method is less than 0.4 %.

  8. See Arabsheibani et al. (2004, 2005, 2007), Black et al. (2003), Elmslie and tebaldi (2007), Ahmed and Hammarstedt (2009), Carpenter (2004, 2007a, 2008b) and, for France, Digoix et al. (2004), Toulemon et al. (2005). On average, in these various studies, about 27 % of heterosexual men and women have college education, as compared with 43 % of gays and over 48 % of lesbians

  9. Same references as the previous footnote

  10. On average, in the various studies, about 40 % of heterosexual men and women have children as compared with 4.5 % of gays and 18 % of lesbians (same references that supra; see also Frank 2006)

  11. Especially the correction, or not, of the selection bias by estimating first a probit model of participation (Heckman two-step estimation).

  12. Articles 225-1, 225-2, 132-77, 222-18-1. English translation of the Code available at: http://www.legifrance.gouv.fr/content/download/1957/13715/version/4/file/Code_33.pdf

  13. For a complete investigation of the various types of discrimination faced by gays and lesbians in the workplace, one can usefully refer to Badgett et al. (2007) for the United States, or Irwin (1999) for Australia.

  14. IPSOS survey conducted in 2004 for the newspaper Têtu, on a national sample of 1,002 persons, representative of the French population over 15 years of age.

  15. European Commission (2008), Discrimination in the European Union: 2008, Eurobarometer Special survey n°296.

  16. 2009 Report on Homophobia, Association SOS Homophobia ed.

  17. CSA Institute, poll n° 0900383: Perception of discriminations in the workplace: viewpoints of private sector employees and of public servants, conducted in March 2009 on national representative samples of private and public sector employees.

  18. The threshold value of 1,000€ has been indexed in accordance with the evolution of the average wage. 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 1,000€/month has been attributed to independent workers. This value, equal to the first quartile of the distribution of independent workers (Rouault 2001), was selected to be sure that all potential economic cohabitation has been eliminated.

  19. Throughout this article, we use the terms “male homosexuals” or gays—and “female homosexuals” or lesbians—to denote the members of our samples of same-sex couples.

  20. 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).

  21. 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.

  22. See for example Antecol and Steinberger (2009), for an econometric study of the central role played by sexual orientation on labor supply in the US.

  23. The wage w i is a net monthly salary including all monetary compensation.

  24. 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

  25. Heckman (1976, 1979).

  26. The residual variance of the earning equation also depends on the Mills ratio and, therefore, on individual characteristics.

  27. The addition of these new variables can be viewed as the introduction of specific constraints necessary for identification.

  28. Sexual orientation is not introduced in the selection equation. Nevertheless, to be cautious, we decided to re-estimate the model with a selection equation including sexual orientation as an explanatory variable. All the estimated parameters of the wage equation and, in particular, the estimates of the wage discrimination remained the same. The results are available upon request.

  29. The definition of the private sector used here includes the large national public companies.

  30. As we use pool data on the period 1996–2007, we include in all regressions time dummies variables to control for structural breaks other the estimation period.

  31. With the semi-logarithmic specification we used, the net impact on wage of the sexual orientation is given by eβi−1 where β i is the estimated coefficient associated with the explanatory variable Gay or Lesbian.

  32. As in the US, the higher level of wages earned by lesbians, compared to heterosexual females, is mainly due to a higher level of investment in human capital, particularly in education (see for example Antecol et al. (2007)).

  33. A lower, but not negligible, wage discrimination in the public sector compared to the private sector, is a result that has already been obtained in several articles: Zweimuller and Winter-Ebmer (1993), Hoffnar and Greene (1996), Berson (2009).

  34. For example, for high-skill jobs, the explanatory variable “Number of children” is statistically significant and plays negatively, while the variable “Number of children × Public sector” is statistically significant and plays positively. This means that the return associated to the number of children in the private sector is equal to e −0.004−1 = −0.4 % while it is equal to e −0.004+0.015−1 = +1.11 % in the public sector.

  35. We focus in this article on wage discrimination only but of course discrimination in low wage jobs can take many other forms than wage differences: barriers to entry for gay men, characteristics that discourage gay men from applying etc.

  36. This explains the lower job stability of gay employees as compared to their heterosexual counterparts (see Table 1).

  37. Cf. Oaxaca (1973), Blinder (1973), Oaxaca and Ransom (1994).

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

    Thierry Laurent & Ferhat Mihoubi

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

Annex: Variables Used in the Selection and Wage Equations

Annex: Variables Used in the Selection and Wage Equations

Table 11 List of variables used
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Laurent, T., Mihoubi, F. Sexual Orientation and Wage Discrimination in France: The Hidden Side of the Rainbow. J Labor Res 33, 487–527 (2012). https://doi.org/10.1007/s12122-012-9145-x

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