Sexual orientation and wage discrimination: evidence from Australia

Alison Preston (Department of Economics, University of Western Australia, Crawley, Australia)
Elisa Birch (Department of Economics, University of Western Australia, Crawley, Australia)
Andrew R. Timming (UWA Business School, University of Western Australia, Perth, Australia)

International Journal of Manpower

ISSN: 0143-7720

Publication date: 19 July 2019

Abstract

Purpose

The purpose of this paper is to document the wage effects associated with sexual orientation and to examine whether the wage gap has improved following recent institutional changes which favour sexual minorities.

Design/methodology/approach

Ordinary least squares and quantile regressions are estimated using Australian data for 2010–2012 and 2015–2017, with the analysis disaggregated by sector of employment. Blinder–Oaxaca decompositions are used to quantify unexplained wage gaps.

Findings

Relative to heterosexual men, in 2015–2017 gay men in the public and private sectors had wages which were equivalent to heterosexual men at all points in the wage distribution. In the private sector: highly skilled lesbians experienced a wage penalty of 13 per cent; low-skilled bisexual women faced a penalty of 11 per cent, as did bisexual men at the median (8 per cent penalty). In the public sector low-skilled lesbians and low-skilled bisexual women significant experienced wage premiums. Between 2010–2012 and 2015–2017 the pay position of highly skilled gay men has significantly improved with the convergence driven by favourable wage (rather than composition) effects.

Practical implications

The results provide important benchmarks against which the treatment of sexual minorities may be monitored.

Originality/value

The analysis of the sexual minority wage gaps by sector and position on the wage distribution and insight into the effect of institutions on the wages of sexual minorities.

Keywords

Acknowledgements

The authors would like to thank two anonymous referees for helpful comments and suggestions. This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS), and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute.

Citation

Preston, A., Birch, E. and Timming, A.R. (2019), "Sexual orientation and wage discrimination: evidence from Australia", International Journal of Manpower, Vol. 41 No. 6, pp. 629-648. https://doi.org/10.1108/IJM-08-2018-0279

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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