Wage equation misrepresents gay wage discrimination: overlooked evidence from Russia

• DOI: https://doi.org/10.1108/IJM-08-2021-0475
• Published date: 30 September 2022
• Date: 30 September 2022
• Pages: 470-483
• Subject Matter: Economics,Labour economics
• Author: Sergey Alexeev

Wage equation misrepresents gay

wage discrimination: overlooked

evidence from Russia

Sergey Alexeev

National Drug and Alcohol Research Centre, UNSW, Sydney, Australia and

NHMRC Clinical Trials Centre, The University of Sydney, Sydney, Australia

Abstract

Purpose –Only data from developed countries were used to estimate the sexual orientation difference in

wages. This paper is the first, which aims to identify the wage discrimination of gay men in Russia –a country

where institutional discrimination and ignorance against gay men are known to present.

Design/methodology/approach –Gays are identified as men who reported having sex with other men in

several waves of the national household survey. A wage equation is used to estimate the gay wage penalty.

Extending the wage equation to implement a difference-in-difference design, the paper also evaluates the effect

of the gay-propaganda law of 2013 on gay wages.

Findings –No wage discrimination is identified. The law also has no adverse effect on gay wages.

Practical implications –Cross-country comparison and theoretical generalizations are premature, and

better identification strategies are needed to understand sexual orientation differences.

Social implications –Policymakers should be aware that in both discriminatory and equit able

environments, there may be hidden inequality even if researchers do not detect it.

Originality/value –The findings are implausible and add to existing evidence that gay discrimination

measured with wage equation suffers from endogeneity and should be interpreted with caution. Particular

caution should be exercised in cross-sectional and time-series comparisons, as a tendency to report the

orientation honestly and unobserved confounders vary by location and time.

Keywords Sexual orientation, Discrimination, Earnings, Anti-LGBT law, RLMS

Paper type Research paper

1. Introduction

Following the work by Badgett (1995), that applied contemporary at the time race

discrimination statistical methods to study sexual orientation discrimination, estimating

wage differences between gay and straight men became a firmly-established research

question with hundreds of contributions. From 1989 to 2014, on average, gay men were paid

less by 9% (Drydakis, 2019) and from 2012 to 2020 by 6.8% (Drydakis, 2021). This reduction

is taken as evidence that the acceptance of gay men is increasing.

This evidence is used to support various versions of the minority stress theory (MST)

posited by Meyer (2003). The theory states that adverse outcomes experienced by gay men

are a direct or indirect result of social oppression. The examples of theories that accentuate

the direct consequences of prejudice include distastes to gay men (Becker, 1957), uncertainties

concerning gay men performance, or perceived lack of leadership qualities (Ashenfelter and

Rees, 2015;K€

ollen, 2016). Examples of indirect harm of prejudice include situations where gay

men engage in risky behavior to cope with the stress caused by prejudice. The examples

include an excessive drug (Prestage et al., 2009) and alcohol use (Peralta, 2008), and

unprotected sex with a large number of sexual partners (Crossley, 2004).

IJM

44,3

470

The paper benefited from the careful and thoughtful comments by Ray Milton Blanchard and John

Michael Bailey. They provided vital references from the psychology literature and shared pivotal

observations from their clinical experience.

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0143-7720.htm

Received 5 August 2021

Revised 25 October 2021

11 March 2022

Accepted 30 August 2022

International Journal of Manpower

Vol. 44 No. 3, 2023

pp. 470-483

© Emerald Publishing Limited

0143-7720

DOI 10.1108/IJM-08-2021-0475