Interactions between Non-Discrimination Laws and Socioeconomic Status of Sexual Minorities

At its core, this project analyzes the interactions between state non-discrimination laws and the socioeconomic status of same-sex households in the United States. There is a large body of work examining the earnings gap for sexual minorities, but there is a dearth in studies looking at the effect of such protective laws. Using annual American Community Survey (ACS) data from 2000 to 2016, we examine the personal total income, household income, and unemployment in the ten states experiencing relevant reform. This study has two main findings. First, we confirm that sexual minorities experience substantial earnings differences, finding that lesbian women experience an income premium of 32.2 percent and gay men face an income penalty of 21.4 percent. Second, we find that non-discrimination laws seem to be decreasing the pay gap in both directions, shrinking the lesbian premium by 6.7 percent and the gay penalty by 12.1 percent. While we are unable to say these effects are causal, in the context of a history of wage penalties for gay males and wage premiums for lesbian women, protective reforms are positively and strongly correlated with closing the lesbian and gay income gap. From these main findings we are left with additional questions including: why does the lesbian premium exist, and why do protective reforms seem to chip away at it? While we review some relevant theories and offer our own, in the end these findings remain a puzzle