Sexual Orientation, Demography and Labor Relations

Sexual Orientation, Demography and Labor Relations

We use data from the 2008-09 Athens Area Study (AAS) to provide the first evidence on the relationship between sexual orientation and earnings in Greece. The AAS asks male adults a direct question about their sexual orientation: about 4.52% self-identify as homosexuals and 0.86% as bisexuals.

Authors: Drydakis Nick
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The current social situation for homosexual and bisexual men represents a problem for Greece. The European Union Agency for Fundamental Rights report (FRA, 2009) highlights that sexual orientation minorities experience unequal treatment and harassment in Greece. In the labor market, researchers often recount instances of biases in order to assert that employment discrimination is common. However, hiring tactics have been found to pose the biggest problem (Drydakis, 2009a;b). These trends are especially striking when considered in the context of legislation aimed at securing improvements in the labor market position of homosexuals and bisexuals (De Schutter, 2008). New Greek laws prohibiting discrimination on the grounds of sexual orientation (2005/3304) came into force in January 2005 under the European Union’s Employment Equality Directive 2000/78. According to this legislation, employment equality applies to everyone, regardless of sexual orientation. Its goal is to ensure that everyone living in the European Union can benefit from effective legal protection against discrimination.

For economists, in order to determine whether sexual orientation minorities face discrimination, it is useful to compare the earnings of homosexuals/bisexuals to the earnings of heterosexuals. If sexual orientation minorities earn less than heterosexuals after accounting for differences in productivity and other factors that influence wages, then the differential may be attributed to labor market discrimination by employers. In Greece, until recently no datasets included data on sexual orientation, which precluded investigation of this discrimination hypothesis. In the current study, data pooled from a 2008-09 random sample, the Athens Area Study, allow, for the first time, testing of whether discrimination against homosexual/bisexual men affects wages.

Knowledge of the size of the homosexual population holds promise for helping social scientists understand a wide array of important questions about the general nature of labor market choices, accumulation of human capital, specialization within households, discrimination, and decisions about geographic location (Black et al., 2000). Demographics would also help in calculating the costs and benefits of marriage benefits and of the impact of legalizing gay adoption. The comparative strength of our study is that it identifies homosexual and bisexual men based on self-reporting of their lifestyle, rather than on sexual behavior that could have been experimental and not indicative of sexual orientation (see Carpenter’s 2005 analysis). Hence, our measure is likely to be correlated with the concept of interest, living an “openly homosexual/bisexual” life, and is arguably better than the sexual behavior measures used in previous research.

Our work concludes that discrimination remains an important cause of the wage gap. Homosexuals’ wages would increase by approximately 4.1% if homosexuals were remunerated on the same basis as heterosexual workers. For bisexuals, the wage discrimination factor is even higher. Of further importance is the finding that sexual orientation minorities who are also older, less educated, blue collar workers, and/or immigrants are statistically more vulnerable to wage discrimination and unemployment than comparable heterosexuals. Moreover, in the current research, in order to better understand the determinants of the wage gaps, we compare homosexual/bisexual men with both married and unmarried heterosexual men. By making these comparisons, we are able to disentangle the penalty associated with being unmarried from other human capital explanations of the wage gap. Overall, the outcomes are consistent with the Taste (Becker, 1957) and/or Statistical theories (Arrow, 1973; Aigner and Clain, 1977) of discrimination.

The evidence set forth here suggests that discrimination continues at alarming levels, and it suggests the need to more closely examine the effects of sexual orientation discrimination and labor market characteristics on employment for homosexual/bisexual workers in Greece. 

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