Sexual Orientation, Social and Economic Consequences

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Sexual Orientation, Social and Economic Consequences


Sexual orientation is generally considered a personal characteristic that reflects an individuals sexual behavior, attraction, or self-identity. Individuals can have a primary orientation toward others of the same sex (gay, lesbian, or homosexual people), toward people of both sexes (bisexual people), or toward people of a different sex (heterosexual people). Social scientists have studied the influence of sexual orientation on social and economic outcomes by comparing the experiences of lesbian, gay, and bisexual (LGB) people with those of heterosexual people. Overall, research shows that sexual orientation is an important influence on health and on economic and social well-being.

In discussions of the social and economic effects of sexual orientation, most interest is focused on LGB people. While controversy exists over exactly how many LGB people live in the United States or other countries, most studies find that 2 to 6 percent of people report sexual behavior, attractions, or a self-identity toward people of the same sex, making people who are LGB a clear sexual minority in numerical terms. Furthermore, heterosexuality is generally the socially accepted sexual orientation, while being LGB is often considered an inferior and stigmatized status. Stigma puts LGB people at a social and economic disadvantage and implies that their lives may be affected by prejudice and discrimination.

One important characteristic of sexual orientation influences the kind of disadvantages experienced by LGB people. Sexual orientation is not a visible characteristic, unlike age, race, or sex, and therefore LGB people can sometimes keep their sexual orientation invisible or allow others to assume that they are heterosexual. Invisibility sometimes allows LGB people to escape ill-treatment, but the activities and effort required to hide sexual orientationcommonly known as being in the closetmay be considerable and can cause psychological and physical stress, not to mention social discomfort.

When LGB people come out of the closet and become more visible in their families, workplaces, and communities, they may be subjected to behavior that reflects prejudice, such as vocal disapproval, social rejection, discriminatory treatment, or even physical violence. Both actual rejection and disapproval and the fear of rejection and discrimination reduce the participation of LGB people in their families, in religious organizations, and in some community activities. The personal effects of prejudice also sometimes include increased depression and anxiety, as well as other physical and mental health conditions. Numerous studies also show that LGB young people are more likely to consider suicide. In contrast, studies show that supportive workplace policies, laws, and coworkers create environments that encourage LGB people to come out, which often improves their workplace lives and mental health.

When some businesses tried to tap into an affluent untapped market by wooing LGB consumers beginning in the 1990s, some people and policymakers wondered whether LGB people actually face economic discrimination. However, many studies by economists show that the reality of economic disadvantage trumps the myth of gay affluence. Gay men earn less than heterosexual men with the same job-related characteristics, with a pay gap of 10 to 32 percent in the United States. Lesbians earn no more than comparable heterosexual women, and in some studies they earn more than heterosexual women. However, the gender pay gap means that a lesbian couple always earns less than a heterosexual married couple and less than a gay male couple, so lesbians are also not the dream market that businesses are said to seek. Also, many employer benefits policies extend health care or survivor benefits to the spouses of employees, but only a minority of employers grant those same rights to LGB employees same-sex partners, resulting in lower total compensation for LGB employees.

Scholars do not agree on the causes of the wage patterns. Some argue that gay mens earnings disadvantage reflects discrimination in the labor market, an argument bolstered by the fact that few states (or countries) forbid employment discrimination based on sexual orientation. Others argue that the wage variances stem from variations in family formation for LGB and heterosexual people. A gay man who partners with another man may not need to support a partner and children, reducing gay mens incentives to gain added job skills and experience and eventually reducing gay mens earnings relative to heterosexual men who might plan to be a sole provider for a family. However, the fact that gay men have more education than heterosexual men suggests that gay mens commitment to investing in job-related skills is at least as strong as for heterosexual men. Likewise, lesbians know that they will not have a male partner, so they might have more skills and experience than heterosexual women, who might also be more likely to leave the labor market for short periods to raise children or do other family-related work. This compensation for differences in family structures could disguise or compensate for any less visible discrimination that lesbians might face that would otherwise reduce their earnings.

The issue of partnership highlights another realm of social and economic disadvantage for LGB people in creating families. Census 2000 counted roughly 600,000 same-sex couples in the United States, with one in three female couples and one in five male couples raising children under eighteen years old. However, in most places LGB people form these families in the absence of access to marriage or full parental rights. Several countries (beginning with the Netherlands, Belgium, Spain, and Canada) and the state of Massachusetts allow same-sex couples to marry, while some other states and European countries provide a different and usually lesser form of legal recognition for same-sex couples. Without the right to marry, couples have no access to important legal rights and benefits that enhance family security and economic well-being.

The social and economic differences in treatment across sexual orientation outlined here have prompted a growing social and political movement around the world to reduce stigma and prejudice and to improve the well being of LGB people. As a result of these efforts, more LGB people are living open lives, more jurisdictions forbid discrimination based on sexual orientation, more employers treat LGB and heterosexual employees equally, and more states and countries are granting rights to same-sex couples.


Badgett, M. V. Lee. 2001. Money, Myths, and Change: The Economic Lives of Lesbians and Gay Men. Chicago: University of Chicago Press.

Cochran, Susan. 2001. Emerging Issues in Research on Lesbians and Gay Mens Mental Health: Does Sexual Orientation Really Matter? American Psychologist 56: 932-947.

Gates, Gary J., and Jason Ost. 2005. The Gay and Lesbian Atlas. Washington, DC: Urban Institute Press.

U.S. Bureau of the Census. 2003. Married-Couple and Unmarried-Partner Households: 2000. Census 2000 Special Reports (CENSR-5).

Woods, James D. 1994. The Corporate Closet: The Professional Lives of Gay Men in America. New York: Free Press.

M. V. Lee Badgett

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Sexual Orientation, Social and Economic Consequences

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