Revisiting Evidence of Labor Market Discrimination against Homosexuals and the Effects of Anti-Discriminatory Laws

Anti-discrimination laws on the basis of sexual orientation have been adopted by many states to counteract perceived discrimination in the labor market. However, we find the evidence of earnings disparities between homosexual and heterosexual men to be extremely sensitive to the choice of reference group. Relative to married heterosexual men, gay men earn less, and, over time, anti-discriminatory laws lessen this gap. Relative to unmarried, coupled heterosexual men, however, gay men experience similar levels of earnings. The choice of reference group leads to opposite conclusions regarding the effectiveness and necessity of an anti-discriminatory law for homosexual men, which highlights the need to construct reference groups with care. We also find that homosexual women experience similar earnings to their heterosexual female counterparts, and the law has no effect on these relative wages.