The purpose of this paper is to estimate whether sexual activity is associated with wages, and also to estimate potential interactions between individuals’ characteristics, wages and sexual activity.
The central hypothesis behind this research is that sexual activity, alike health indicators and mental well-being, may be thought of as part of an individual’s set of productive traits that affect wages. Using two-stage estimations the author examines the relationship between adult sexual activity and wages.
The author estimates that there is a monotonic relationship between the frequency of sexual activity and wage returns, whilst the returns to sexual activity are higher for those between 26 and 50 years of age. In addition, heterosexuals’ sexual activity does not seem to provide higher or lower wage returns than that of homosexuals, but wages are higher for those health-impaired employees who are sexually active. Over-identification tests, robustness checks, falsification tests, as well as, decomposition analysis and sample selection modelling enhance study’s strength.
Contemporary social analysis suggests that health, cognitive and non-cognitive skills and personality are important factors that affect wage level. Sexual activity may also be of interest to social scientists, since sexual activity is considered to be a barometer for health, quality of life, well-being and happiness.
The paper adds to the literature on the importance of unobserved characteristics in determining labour market outcomes.
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