ΛΕΣΒΙΕΣ ΚΑΙ ΕΛΛΗΝΙΚΗ ΑΓΟΡΑ ΕΡΓΑΣΙΑΣ 2

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Women’s Sexual Orientation and Labour Market Outcomes

Dr Drydakis Nick

Abstract: This study provides evidence on the relationship between lesbian women and their hiring prospects by employing the Correspondence Test forGreece. The data analyzed supports the findings of previous experiments and indicates that hiring discrimination against lesbians is present. More importantly, entry wage differentials assigned are not consistent with the ascendant empirical claims that lesbians have higher market earnings. Our findings suggest that currently lesbians both anticipate and encounter job discrimination.

1. Introduction
2. Lesbians’ Performance in the Labour Market: A Review

While there have been numerous economic studies of race and sex discrimination, the issue of discrimination on the basis of sexual orientation has been largely neglected. Evidence of employment discrimination to date largely comes from data collected in studies of the socio-economic status of lesbians and from personal accounts. In typically brief discussions of the problem, researchers report their assertions that employment discrimination is common by recounting instances of unequal treatment (Levine and Leonard [1984], Palmer [1993)],Colgan et al. [2006]). These incidents against lesbians involve the use of institutionalized procedures to restrict officially conferred work rewards, such as promotions, salary increases or increased job responsibilities. Lesbians who are subject to discrimination and harassment at work describe a variety of experiences ranging from discomfort and signs of embarrassment on the part of managers and colleagues to exclusion by colleagues through insults. Nevertheless, hiring or firing tactics posed the biggest problem.

Although field experiments can significantly contribute to our perception of other factors that affect the opportunities of minority groups to access employment, only two have been carried out to test sexual orientation’s effect on the hiring process of lesbians. Adam (1981) employed a field experiment for testing discrimination based on sexual orientation and found a reduction of 6% in job offer rates for lesbians in the city of Toronto, Canada. Twenty-two years later, Weichselbaumer (2003) used a similar technique to investigate whether the Austrian labour market discriminated against lesbian women. She found that indicating a lesbian identity reduced the offer rate by about 12-13%.

Both experiments agreed that discrimination could explain the differences in hiring. These field experiments have not been designed to distinguish between the various hypotheses that have been promulgated to account for discrimination, but the pattern of results does enable some tentative speculation. The findings of these tests are consistent with the notion that a majority of the population has a general tendency to discriminate, motivating employers to discriminate against the non-majority population (Becker [1957]). The observed discrimination can also occur if employers use group information when evaluating applicants (Arrow[1973]). Field experiments have not, to date, been designed to allow firm conclusions about the nature of discrimination, but experiments may illustrate acombination of causes (Riach and Rich [2002]).

Although data limitations remain a major obstacle to research on the lesbian and gay population, a number of useful earnings data sources have been developed, giving rise to a nascent literature. These studies use multivariate regressions to assess the effects of sexual orientation on earnings after productivity factors are controlled. In brief, there is stronger evidence of discrimination against gay men than against lesbians. In this study, we make no attempt to review the existing literature of gay men’s earning differentials: Jepsen(2007), as well as Carpenter (2005), provide discussions of many relevant issues.

There is an important empirical question of lesbians’ earning differentials based on sexual orientation. In the US Badgett (1995), using data from the 1989-91 General Social Survey (GSS), found that lesbians earned 35% less than heterosexual women. The coefficient, however, was statistically insignificant. In subsequent work, Badgett (2001) found that lesbians earn more than heterosexual women, but the coefficient was again insignificant. Berg and Donald (2001), using 1991-6 GSS data, estimated that non-heterosexual women earned 30% more than heterosexual women. Clain and Leppel (2001) used data from the 1990Census and found that lesbians earned more than heterosexual women. Black et al.(2003) employed GSS data from 1989-96 and found earnings to be between 20%and 34% higher for lesbian women than for heterosexuals. The same patterns arefound in Berg and Lien (2002) and Blandford (2003). Daneshvary et al. (2007),using data from the 2000 Census, found a lesbian premium of approximately 10%for women without a bachelor’s degree, but it was nearly non-existent for women with higher levels of education. Jepsen (2007), using data from the 2000 Census, found that lesbians earn more than their heterosexual counterparts. Elmslie and Tebaldi (2007) utilized the 2004 Current Population Survey and found no evidence of discrimination against lesbians.

Carpenter (2005) used data from a public health survey in California(California Health Interview Survey) and found statistically insignificant earnings differentials for lesbians compared to heterosexual women. In the United Kingdom, Arabsheibani et al. (2004), using data from the Labour Force Survey between 2001 and 2005, found that lesbians earned about 9% more than heterosexual women. In the Netherlands, Plug and Berkhout (2004) employed data from an annual survey between 2003-2006 of individuals who had completed a college education and found that similarly qualified lesbian workers earned about 3% more than their heterosexual female co-workers.

The general trend of the studies suggests that lesbian workers might earn more than heterosexual women. This result seems inconsistent with the notion of employers’ discrimination on the basis of sexual orientation and is particularly curious given that lesbians do not enjoy higher societal approval than heterosexualwomen. The pattern of lesbian women earning higher wages than heterosexuals is consistent with the theory of human capital accumulation and specialization within the household (Becker [1965]; [1991], Kurdek [1993], Black et al. [2003];[2007]).

Many young people make human capital investments based on the expectations that they will form traditional households in which the husband and wife will specialize differentially in market and non-market production. The Becker (1965) model suggests that in a traditional household, the male spouse will devote more time and effort to market production, while the female will devote more time and effort to household production. Lesbians, however, who realize early in life that they will not marry into a traditional household, will generally invest more heavily in market-oriented human capital. They will be more likely to undertake a series of career-oriented decisions, such as staying in school longer,choosing a major that is likely to lead to a higher paying job and working longerhours, than they would if they were adopting traditional gender-based household specialization roles.

A peripheral explanation for the lesbian earning premium might be that women with children earn less than women without children (Waldfogel [1998]). As lesbians are less likely to have children than married women, it stands to reason that lesbians might earn more than heterosexual women. This factor makes employers more interested in promoting lesbians, as they are less likely to move in and out of the labour market, creating a wage inequality (Jepsen [2007], Elmslie and Tebaldi [2007]).

Clain and Leppel (2001) suggest that employers, co-workers and consumers might prefer the personality characteristics of males and that lesbians exhibit more of those characteristics than do heterosexual women. Riess et al.(1974) found lesbians to be more “dominant, autonomous, assertive and detached”, like the stereotypical male. Thus, the higher earnings of lesbians might reflect discrimination in favor of traits rather than against traits (Jepsen [2007]). Last, but not least, there is the opinion that when lesbians are open about their sexual orientation in employment, they might respond to the threat of employment discrimination by working harder. Many believe that if they are sufficiently productive, they could overcome the stigma of their sexual orientation. In this state of mind, the stigma tends to be a productivity advantage (Woods[1993], Clain and Leppel [2001]). It is apparent that lesbian women face constraints different from those facing heterosexual women, and therefore make different choices regarding important dimensions of their lives. Labour markets financially compensate those women who invest their lives in their careers, and lesbians might be optimal for this pattern.