Transgender labour market outcomes: Evidence from the United States

Abstract

Alternative labour market outcomes for men and women have been studied extensively in past literature. However, existing studies fail to directly compare labour market differences between transgender and non‐transgender people. We utilize data from the 2015 Behavioral Risk Factor Surveillance System in the United States to examine employment and wage differentials between transgender persons and non‐transgender people using the Fairlie decomposition method of 2005. Our findings suggest that transgender people are less likely than non‐transgender people to be employed, and are more likely than non‐transgender people to receive lower wages. While some of the difference in employment and wage gaps is explained by sociodemographic characteristics, part of the gap remains unexplained. Approximately 64 per cent of the employment differential and 43 per cent of the wage differential is unexplained and may be due to discrimination. Therefore, our findings highlight the importance of appropriate anti‐discrimination policy.