Lgbt project presentation 3

The Economics of
Being Gay
Matthew Kinoshita
Alliant International University, Irvine
December 7, 2011

The Question

• This project began with a question.
• “Does being gay come with a financial cost?”

An Overview

• There have been several studies which attempted to answer
whether there is discrimination between heterosexual and
homosexual income. There are a variety of policies and
factors which have influenced the wage gap. This
presentation is a condensed aggregate of a few influential
studies, their findings, and my ideas about the implications
for our work as therapists.

The Economic Cost of Homosexuality
by Baumle & Poston

• Method: The researchers utilized regression
analysis to analyze their data

• Sample: Included only individuals who indicated
being part of an unmarried partnership (hetero or
homosexual) or married partnership (different-sex)

Baumle, A.K. & Poston, D.L. (2011). The economic cost of homosexuality: Multilevel analyses. Social Forces, 89 (1), 1005-
1032.

by Baumle & Poston
• Variables
• Dependent Variable = Logged Earnings
• Key Independent Variable = Sexual Orientation

Other independent variables of Other independent (contextual)
personal character: variables of the state level:
Level of education Presence of 2 types of sodomy laws
Occupation Percent of population voting
Experience Republican
Median earnings of occupation Per capita gross state product
Race Manufacturing gross state product
English fluency Presence of antidiscrimination laws
Children present Prevalence of gay populations
Percent Southern Baptist

1032.

by Baumle & Poston

• Baumle & Poston conducted two tests.
1. They conducted OLS (ordinary least squares)
Regression analyses
2. They then conducted multilevel HLM (hierarchical
linear model) analyses
The implications of these different tests are that the HLM
model can integrate the two groups of variables
mentioned in the previous slide. Thus the individual
variable data can be studied first then studied within the
context of the state level variables as well. HLM models
are preferred when dealing with “nested” (sets within
other sets) of data.
1032.

by Baumle & Poston

• Results:
OLS Analysis Found: HLM Analysis Found:
1. Gay men earn on average 1. Gay men earn on average
10.7% less than married men 12.5% less than married men
2. When compared to cohabiting 2. When compared to cohabiting
heterosexual men, gay men heterosexual men, gay men
earned 2.1% more earned .15% less NOT
3. Compared to married statistically significant
women, lesbians earned 4% 3. Compared to married women,
more lesbians earned 3.5% more
4. Compared to cohabitating 4. Compared to cohabitating
heterosexual women, lesbians heterosexual women, lesbians
earned 8% more earned 9% more

1032.

by Baumle & Poston

• Discussion
1. Baumle and Poston (2011) emphasized, “the difference
between the OLS and multilevel models emphasizes the
relevance of considering contextual characteristics.” (p.1022)
2. Much of the difference in income could be attributable to
marital status.
3. Some of the difference for heterosexual married couples may
be attributable to traditional gender roles, but the effect on
same sex couples is uncertain.
4. A large and statistically significant earning advantage exists
for lesbians in both the OLS and HLM analyses.

1032.

Discrimination Versus
Specialization
by E.D. Schmitt
• In this article, Schmitt (2008) examines the
possible reasons for the economic disparities
between homosexual and heterosexual
individuals. She analyzed the results of seven
different earnings studies and drew conclusions
about the possible reasons for the gaps in
earnings.

Schmitt, E.D. (2008). Discrimination versus specialization: A survey of economic studies on sexual orientation, gender and earnings in the United
States. Journal of Lesbian Studies, 12 (1), 17-30. doi: 10.1080/10894160802174250

Specialization by E.D. Schmitt

Schmitt then explained three various groups of information that
economists study to determine influences on wage differentials.
These three groups of information are:

• Human Capital
• Discrimination
• Household Specialization


• Schmitt (2008) defines human capital in two different
constructs.

• 1. Education
• 2. Experience (work)

The implication of sexual orientation on each of these constructs may be
powerful. Schmitt (2008) explains, “sexual orientation may affect earnings
through its impact on the return to human capital investment
(discrimination) or through its impact on decisions about the accumulation
of human capital (discrimination and specialization)”(p.21). In plain
English, if you are homosexual, you may be treated differently and paid less
or you may make decisions about investing in yourself thinking that you will
be paid less anyway, so why bother to gain valuable education or
experiences building your career.


• Schmitt’s critical thoughts on discrimination and
the measurement of such constructs:
1. Sexual orientation is not easily observable, some may be able
to pass as heterosexual and not be subjected to discrimination
2. The expectation of making less money for equal work could
lead to decisions not to invest in human capital (education,
experience)
3. Homosexuals may be making conscious decisions to work in
occupations that are more accepting or easier to hide their
sexual orientation (compensating differential)



• Schmitt’s critical thoughts on household
specialization:
1. In traditional heterosexual gender roles, women will occupy
their time with household supporting work while men will plan
for and invest in a career, thus leading to higher wages for
heterosexual men and lower wages for heterosexual women.
2. Lesbians will prepare for and invest in human capital expecting
to work in the marketplace without employee benefits of a
partner, thus resulting higher wages.
3. The household specialization model is less helpful in
predicting earning differentials in male homosexual
partnerships.

Results of cited studies:
Study Earnings Premium (penalty) Earnings Premium (penalty)
Gay/Bisexual men Lesbian/Bisexual women
Badgett (1995) (11%-27%) (12%-13%)
Berg & Lien (2002) (22%) 30%
Black et al. (2003) (14%-16%) 20%-34%
Blandford (2003) (30%-32%) 17%-23%
Klawitter & Flatt (1998) (26%-32%) 17%-21%
Clain & Leppel (2001) (16%-22%) Premium (size not given)
This table shows that studies consistently show an earnings penalty for
gay/bisexual men when compared to heterosexual men. It also shows an
earnings premium for lesbians in the majority of studies.



• Hypotheses for the disparity in earned wages
1. Discrimination: Are heterosexual men favored when compared to
homosexual men? Are lesbian women favored when compared to
heterosexual women? The findings suggest that discrimination
may be creating the earnings gap
2. Household specialization theory predicts the lesbian wage
premium. As a result, lesbians are probably more likely to work
than raise families, stay at home, or expect to benefit from
partnership
3. There may be measurement problems: The data sets analyzed all
rely on self-identification of sexual orientation. The variance in
different studies results suggest inconsistencies in data
measurement.

Sexual Orientation and Earnings
by Ahmed & Hammarstedt

• This study examined the same constructs as the previous
two, except the data is of Swedish citizens.

• In Sweden, homosexual relationships are recognized as valid
civil unions!

• The data sets were robust and did not rely on self-
identification, however single homosexuals and partners who had
not married were not accounted for.

Ahmed, A.M. & Hammarstedt, M. (2009). Sexual orientation and earnings: A register data-based approach to identifying homosexuals. Journal of
Popular Economics, 23, 835-849. doi: 10.1007/s00148-009-0265-4


• Results:

Earnings Earnings premium
premium (deficit) Non-
Metropolitan
(deficit) in
areas
Metropolitan
Areas
Gay Men (10%-15%) (15%-20%)
Lesbians No No
significant significant
difference difference


• The authors discuss possible reasons for their findings:

In general for men and women:
1. Homosexuals may choose to live in more gay friendly places (usually metropolitan
areas like Stockholm, Gothenburg and Malmo, the three largest Swedish cities), hence
the smaller gap in metropolitan locales

For men specifically:
1. Gay men are subject to more hostility
2. Gay men are more likely to be considered mentally ill
3. Gay men are statistically more likely to contract HIV/AIDS and as a result, employers
may discriminate against them
4. If a gay man chooses a more traditionally female gender role, he will stay home and
therefore be earning considerably less money. As a result, these men will skew the
earning results of gay men downward

For women specifically:
1. Lesbians may me perceived as more independent, assertive, aggressive and confident
than heterosexual women, in essence, more masculine and good for work


The Verdict
• After analyzing a number of studies on the subject, it is
suggested that gay men consistently suffer from earnings
disparities in both the context of American culture and in
Swedish culture. Lesbians, on the other hand, appear to
have an earnings advantage in the United States, but no
advantage in Sweden. Nevertheless, women seem to have
it much better than men when it comes to sexual
orientation’s effects on earning differentials.

The Implications
• As clinicians, how can we use this information to more
effectively treat our clients?

This is the perfect opportunity for the WSIM Model! By
employing the WSIM model, Croteau et al. (2000) discovered
we can expect the client to gain proficiency in managing
behaviors with regard to “workplace rewards such as income
and promotion, workplace climate factors such as support or
hostility, interpersonal relationship factors such as intimacy and
separation and personal reactions such as satisfaction with
level of disclosure, sense of integrity, and sense of personal
safety” (as cited in Lidderdale, Croteau, Anderson, Tovar-
Murray and Davis, 2007)
Lidderdale, M.A., Croteau, J.M., Anderson, M.Z., Tovar-Murray, D., & Davis, J.M. (2007). Building lesbian, gay and bisexual vocational psychology: A theoretical
model of workplace sexual identity management. In Bieschke, K., Perez, R., DeBord, K. (Eds.) Handbook of Counseling and Psychotherapy with
Lesbian, Gay, Bisexual a nd Transgender Clients, 2nd Ed. (pp.245-270). Washington DC: American Psychological Association.

The Intervention
• The WSIM model consists of four stages:

1. Developing learning experiences about sexual identity
management

1. Developing personally acceptable identity management
strategies

1. Choosing and implementing sexual identity management
strategies

1. Learning from outcomes

Lidderdale, M.A., Croteau, J.M., Anderson, M.Z., Tovar-Murray, D., & Davis, J.M. (2007). Building lesbian, gay and bisexual vocational psychology: A theoretical
model of workplace sexual identity management. In Bieschke, K., Perez, R., DeBord, K. (Eds.) Handbook of Counseling and Psychotherapy with
Lesbian, Gay, Bisexual a nd Transgender Clients, 2nd Ed. (pp.245-270). Washington DC: American Psychological Association.

Final Thoughts

• After discovering the WSIM in our literature a few
ideas stood out to me as helpful and important. I am
always interested in structured ways in which clients
may be able to understand their experience with
greater meaning and personal agency. The WSIM is
designed to assist clients through this process.
Context is also critical to honor and explore when
presented with such complex issues such as wage
discrimination. As we can now see, the wage gap is
very real, and affects so many from the LGBTQ
community. As therapists, with tools and
competency, we may better serve our clients.

My Questions to Ponder

• Were the findings surprising to you? Do you have
other ideas why the results may have looked the
way they did?

• Do you have ideas about how this issue may be
addressed?

References
Ahmed, A.M. & Hammarstedt, M. (2009). Sexual orientation and earnings: A register
data-based approach to identifying homosexuals. Journal of Popular
Economics, 23, 835-849. doi: 10.1007/s00148-009-0265-4

Baumle, A.K. & Poston, D.L. (2011). The economic cost of homosexuality: Multilevel
analyses. Social Forces, 89 (1), 1005-1032.

Schmitt, E.D. (2008). Discrimination versus specialization: A survey of economic
studies on sexual orientation, gender and earnings in the United States. Journal
of Lesbian Studies, 12 (1), 17-30. doi: 10.1080/10894160802174250

Lidderdale, M.A., Croteau, J.M., Anderson, M.Z., Tovar-Murray, D., & Davis, J.M.
(2007). Building lesbian, gay and bisexual vocational psychology: A
theoretical model of workplace sexual identity management. In
Bieschke, K., Perez, R., DeBord, K. (Eds.) Handbook of Counseling and
Psychotherapy with Lesbian, Gay, Bisexual and Transgender Clients, 2nd Ed.
(pp.245-270). Washington DC: American Psychological Association.

Lgbt project presentation 3

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