Differences Do Not Matter: Exploring the Wage Gap for Same-Sex Behaving Men
AbstractAn emerging literature provides evidence that same-sex behaving men earn significantly less than different-sex behaving men. I corroborate these existing findings and explore the source of these earnings differentials. I show that differences in worker characteristics between same-sex behaving men and different-sex behaving workers cannot explain the significant wage differential that same-sex behaving men experience. Wage differentials for same-sex behaving men are surprising because sexual orientation is not a visible trait. It seems as though same-sex behaving men might use a strategy of “passing” to avoid discrimination. I develop a model of worker-firm interaction that incorporates passing. I show the existence of an equilibrium in which wage differentials reflect a compensating differential, where same-sex behaving workers accept lower wages in exchange for being able to reveal their sexual orientation within a tolerant firm. In this equilibrium, competition will not erode earnings differentials as traditional models of discrimination suggest.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Eastern Economic Journal.
Volume (Year): 39 (2013)
Issue (Month): 1 ()
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Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
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- Clarke, Geoffrey & Sevak, Purvi, 2013. "The disappearing gay income penalty," Economics Letters, Elsevier, vol. 121(3), pages 542-545.
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