The Sexual Orientation Wage Gap: The Role of Occupational Sorting, Human Capital, and Discrimination
AbstractUsing data from the 2000 U.S. Census, we document and explore three alternative explanations for the sexual orientation wage gap: occupational sorting, human capital differences, and discrimination. We find lesbian women earn more than their heterosexual counterparts irrespective of marital status while gay men earn less than their married heterosexual counterparts but more than their cohabitating heterosexual counterparts. Using a Oaxaca-Blinder decomposition we find that differences in human capital accumulation (particularly education) are the main reason behind the observed wage advantages, while discrimination and occupational sorting play a minimal role at best. Wage penalties, on the other hand, are largely explained by discrimination. Interestingly, while we do find there are some differences in the relative roles of our three alternative explanations across the wage distribution using a DiNardo, Fortin, Lemieux decomposition, the main conclusions from the Oaxaca-Blinder decomposition persist.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2945.
Length: 42 pages
Date of creation: Jul 2007
Date of revision:
Publication status: published as 'The Sexual Orientation Wage Gap: The Role of Occupational Sorting and Human Capital' in: Industrial and Labor Relations Review, 2008, 61 (4), 518-543
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Find related papers by JEL classification:
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
- NEP-HRM-2007-08-08 (Human Capital & Human Resource Management)
- NEP-LAB-2007-08-08 (Labour Economics)
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