Isolating Discrimination in the Sexual Orientation Wage Gap

At the end of 2016, twenty-three U.S. states prohibited employers from discriminating on the basis of sexual orientation. This legislation increases the cost of discrimination in particular states, creating a natural experiment with roughly half of the country in a treatment group and the other half in a control group. Data from the American Community Survey indicate that the passage of anti-discrimination legislation is associated with a significant increase in employment rates and wages of gay men, it has no effect on employment outcomes for lesbian women. Controlling for educational attainment, labor supply decisions, and occupational standing reveals a persistent gay male wage penalty. Controlling for these same factors reveals a persistent wage premium for lesbian women