Sexual Orientation, Income, and Stress at Work

Abstract

I present a model explaining recent findings that partnered gay men earn less than partnered straight men while partnered lesbian women earn more than partnered straight women. In an environment with compensating differentials and a gender gap in potential income, an income effect leads partnered gay men to choose jobs with lower income and higher amenities than partnered straight men. The same mechanism generates similarly reasoned predictions about income and amenities for women and single people. Canadian data on stressfulness of one's working environment support these predictions.