Sexual Identity, Earnings, and Labour Market Dynamics: New Evidence from Longitudinal Data in Australia

52 Pages Posted: 1 Apr 2015

See all articles by Joseph J. Sabia

Joseph J. Sabia

San Diego State University - Department of Economics

Mark Wooden

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; IZA Institute of Labor Economics

Date Written: March 30, 2015

Abstract

Using newly collected data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, this study presents new estimates of the earnings effects of sexual orientation in Australia and offers the first empirical investigation of the labour market trajectories of lesbian/gay/bisexual individuals. Our results show that gay males are: (i) less likely to be continuously employed than their heterosexual counterparts, and (ii) face an earnings penalty of approximately 20 percent, driven, in part, by a longer-run earnings growth penalty relative to heterosexuals. Individual fixed effects estimates show that males entering into same-sex partnerships experience earnings declines relative to those entering into opposite-sex partnerships. For lesbians, we find evidence of an earnings premium, explained largely by increased labour supply on the intensive margin and, to a lesser extent, greater earnings growth over time.

Keywords: Sexual orientation, labour market dynamics, earnings trajectories, HILDA Survey

JEL Classification: J31, J71

Suggested Citation

Sabia, Joseph J. and Wooden, Mark, Sexual Identity, Earnings, and Labour Market Dynamics: New Evidence from Longitudinal Data in Australia (March 30, 2015). Melbourne Institute Working Paper 8/15. Available at SSRN: https://ssrn.com/abstract=2587434 or http://dx.doi.org/10.2139/ssrn.2587434

Joseph J. Sabia

San Diego State University - Department of Economics ( email )

5500 Campanile Drive
San Diego, CA 92182
United States

Mark Wooden (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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