The Earnings Effect of Sexual Orientation: British Evidence from Worker‐Firm Matched Data

Published date01 December 2018
Date01 December 2018
DOIhttp://doi.org/10.1111/bjir.12304
British Journal of Industrial Relations doi: 10.1111/bjir.12304
56:4 December 2018 0007–1080 pp. 744–769
The Earnings Effect of Sexual
Orientation: British Evidence
from Worker-Firm Matched Data
Jing Wang , Morley Gunderson and David Wicks
Abstract
Using the British Workplace Employment Relations Study (WERS) with
its preferred self-identified measure of sexual orientation as well as its
organizational-level variables, we find that gay men earn about the same as
heterosexual men and lesbians earn significantlymore than heterosexual women.
Working in an organization with a diversity and equity management (DEM)
policy generally has a positive eect on the earnings of gay men and lesbians,
especially if they are single. Implications for theories of diversity management,
discrimination and market versus household production are discussed.
1. Introduction
Lesbian and gay (LG) persons,despite relatively large numbers and increasing
visibility in the workforce, remain a relatively understudied minority group
(Raggins 2004). This is especially the case in the mainstream management
scholarship (Anteby and Anderson 2014) despite the advancements in the
way they are viewed by the scholarly community and the evolution of legal
rights in the Western world. Research on LG persons, in society in general
and in organizations in particular, is a relatively new phenomenon, starting
with Badgett (1995) and developing in tandem with the gay rights movements
over the past several decades. The visibility of the gay rights movement and
its eectiveness in stimulating legal reform have probably done more than
anything else in opening up discussion about sexual minorities whountil that
point had been viewed as medically abnormal and/or sociallydeviant (Anteby
and Anderson 2014).
Jing Wang is at the School of Human Resource Management, York University. Morley
Gunderson is atthe Centre for Industrial Relations and Human Resources,University of Toronto.
David Wicksis at Sobey School of Business, Saint Mary’s University.
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2018 John Wiley & Sons Ltd.
The Earnings Eect of Sexual Orientation 745
Despite the relatively recent development of gay and lesbian rights, much
of the research on LG persons at work,especially on their wages and benefits,
was done either a decade ago (e.g. Antecol et al. 2008; Black et al. 2003;
Carpenter 2007; Elmslie and Tebaldi 2007) or used decade-old data (e.g.
Ahmed et al. 2011, 2013; Klawitter 2011; Martell 2013). Most of thatresearch
found that, after controlling for other determinants of pay, gay men earn
less than heterosexual men (e.g. Ahmed et al. 2011, 2013; Carpenter 2007;
Drydakis 2014a; Elmslie and Tebaldi2007; Klawitter 2011; Martell 2013), but
lesbians earn more than their heterosexual counterparts (e.g. Ahmed et al.
2011, 2013; Antecol et al. 2008; Black et al. 2003; Drydakis 2014a; Jepsen
2007; Klawitter 2011).
The limited number of earlier studies from theUnited Kingdom has similar
findings based on Labour Force Survey data where homosexuality is defined
as living with a same-sex partner (Arabsheibani et al. 2004, 2005). However,
based on a field experiment where resumesprovided a signal of homosexuality,
Drydakis (2014b) found thatgays and lesbians earned essentially the same pay
as their heterosexual counterparts (1–2 per cent lower).As well, based on self-
identified sexual orientation, as in our study, in a 2000–01 survey of British
Universities, Frank (2006) finds no pay disadvantage for LG faculty or sta.
The British Social Attitudes Survey (2012) documented increased tolerance
of homosexuality as evidenced by 47 per cent of people saying that they are
‘not wrong at all’, up from 17 per cent in 1983. On an international basis,
the United Kingdom is fairly high in the comfort level that LG employees
feel in being open at work about their sexual orientation. Johnson (2015)
provides survey evidence from 24 countries indicating that 45 per cent of
LG employees in the United Kingdom feel comfortable expressing their
sexual orientation to fellow employees in the workplace. This is third highest
on the list, with Netherlands at 66 per cent and Australia at 51 per cent.
However, such openness is not the same everywhere around the world. For
example in India only 8 per cent of LG employees feel comfortable to
be open about their sexual orientation at the workplace. Johnson’s survey
evidence also indicated that in the United Kingdom, 46 per cent of LG
people reported experiencing homophobia at their workplace, compared
to 25 per cent in Germany and 68 per cent in Brazil and 61 per cent
in India. Clearly tolerance for homosexuality has increased in the United
Kingdom, and the United Kingdom is high by international standards in
such tolerance, but substantial intolerance and homophobia still remains
(Johnson 2015).
Some research also showed that there is a substantial pay gap between gay
and lesbian workers and their heterosexual counterparts even in countries
such as Canada, Sweden, Australia, and the Netherlands with established gay
rights legislation (Drydakis 2014a). The size of these estimates,however,varies
widely, and some even found there are no dierences in earnings between
LG persons and their heterosexual counterparts (e.g. Carpenter 2005; Frank
2006). To help explain these dierences, Klawitter (2015) conducted a meta-
analysis of 31 articles on sexual orientation and earnings and pointed out that
C
2018 John Wiley& Sons Ltd.

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