This work explores the role of discrimination in shaping individuals’ lives and opportunities, with specific respect to sexual orientation. The role of sexual orientation in explaining earning differences has been increasingly emphasized in empirical literature on discrimination mainly as a result of the growing availability of data sources on gays and lesbian populations. Available evidence predominantly converges on the one hand on the identification of discrimination treatments for gays and positive wage differential for lesbian women with respect to heterosexual counterparts. On the other hand, disagreement pervades interpretations of the predominant above-described labour market outcome. In trying to move beyond such conflicting views, we consider a holistic approach to social exclusion, defined as individuals’ ability to fully participate to social life by examining five domains: monetary poverty, labour market attachment, housing conditions, subjective well-being, and education. Three samples of different waves of the Banca d’Italia “Survey on household income and wealth” (SHIW - 2006, 2008 and 2010) were pooled in order to perform the empirical analysis on a reasonably sized sample of heterosexual couples identified according to a cohabitation criteria. Following the SHIW characteristics and definition of household, we are able to differentiate homosexual couples belonging to a sub-population of out same-sex couples from those who are not openly out about their homosexual relationship. We develop an understanding of social exclusion as a non-dichotomous concept (that is, one is not necessarily “included” or “excluded”, but a continuum of intermediate conditions exist) through fuzzy analysis techniques and develop a synthetic index of inclusion/exclusion as well as a number of partial indexes, composed of several variables pertaining to a certain domain. Overall indicators of social exclusion are examined for the full sample and for the sub-sample of workers only, comparing individuals cohabiting in same-sex couples with heterosexual counterparts. Our results point out that a significant and non-negligible portion of the social exclusion suffered by lesbian and gay couples cannot be accounted for by observable factors and may therefore be attributed to the impact of discrimination. Coherently with the existing literature, we find a differentiated impact on gay men and lesbian couples. However, and possibly more relevantly, we also find significant differences between the couples of “out” homosexual individuals and those composed of “closeted” individuals.
