Sexual Orientation and Wages in Young Adulthood: New Evidence from Add Health

Abstract

Using data from a rich new data source, the National Longitudinal Study of Adolescent Health, the author examines the sensitivity of the estimated earnings penalty faced by sexual minorities to 1) the use of multiple measures of sexual orientation, including both identity/attraction and behaviorally based definitions, and 2) controls for family and individual heterogeneity. Baseline regression results show that gay males and bisexuals earn less than their heterosexual counterparts, a result that persists after controlling for family-level observables. However, after controlling for personality and isolating self-identified sexual minorities who are most likely to be observed as such by employers, the estimated wage penalty for bisexuals falls sharply in absolute magnitude while the wage penalty for gay males persists. Preferred specifications show that relative to heterosexual males, gay males earn wages that are 13.1% lower, a result that is consistent with labor market discrimination. Neither lesbians nor bisexual females earn significantly less than their heterosexual counterparts.