A new EBRD Working Paper (number 196)
Most prior work on sexual orientation and labour market earnings has relied either on individual-level surveys with small samples of sexual minorities or has used large samples of same-sex couples. We use a large individual-level dataset that allows us to measure both constructs. We replicate the well-documented lesbian advantage and gay male penalty in couples-based comparisons but show that these effects are absent in similarly specified models of non-partnered workers. This suggests both that couples-based samples overstate the true earnings differences attributable to a minority sexual orientation and that household specialisation plays an important role in the lesbian earnings advantage. Finally, we discuss how the effects reconcile with theories of specialisation and discrimination.