Abstract
Anti-discrimination laws on the basis of sexual orientation have been adopted by many states to counteract perceived discrimination in the labor market. However, we find the evidence of earnings disparities between homosexual and heterosexual men to be extremely sensitive to the choice of reference group. Relative to married heterosexual men, gay men earn less, and, over time, anti-discriminatory laws lessen this gap. Relative to unmarried, coupled heterosexual men, however, gay men experience similar levels of earnings. The choice of reference group leads to opposite conclusions regarding the effectiveness and necessity of an anti-discriminatory law for homosexual men, which highlights the need to construct reference groups with care. We also find that homosexual women experience similar earnings to their heterosexual female counterparts, and the law has no effect on these relative wages.
Highlights
Gay and lesbian rights advocates have pursued passage of legislation that explicitly prohibits workplace discrimination based on sexual orientation since the 1970s (Rimmerman et al, 2000)
The results of our analysis suggest that when we control for labor market trends in each state, anti-discrimination laws only have an effect on relative earnings as time since passage of the law increases
Holding everything else equal, including time and place, we find no evidence that, relative to heterosexuals, men and women in same-sex partnerships who locate in states where anti-discrimination laws (ADLs) have been passed have better employment prospects than those in states without ADLs (ADL*Sex Relationship (SS))
Summary
Gay and lesbian rights advocates have pursued passage of legislation that explicitly prohibits workplace discrimination based on sexual orientation since the 1970s (Rimmerman et al, 2000). The DDD controls for state specific time trends that are independent of the passage of an antidiscriminatory law To our knowledge, this is the first study to employ a DDD approach to analyze the effect of anti-discriminatory laws on wages of homosexuals and heterosexuals.. A person can reside in a jurisdiction with no law, but work in a place with one Data suggest that this may not be as important at the state level since many of the states with anti-discrimination laws (ADLs) based on sexual orientation are clustered in the northeast. The results of our analysis suggest that when we control for labor market trends in each state, anti-discrimination laws only have an effect on relative earnings as time since passage of the law increases.
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