This article uses data from the Labour Force Survey to examine the effect sexual orientation has on wages in Britain. In doing so it provides the first empirical investigation of the effect being in a same-sex legal partnership has on wages. The results show that gay cohabitees and lesbians face a wage premium compared to their heterosexual counterparts. Decomposition results show that for gay cohabitees this arises due to differences in observable characteristics, while lesbians not only earn significantly more due to differences in their observable characteristics, but they also receive a higher return for these characteristics. In contrast, although no significant difference in earnings is observed for men in a legal partnership, decomposition results suggest that legally partnered gay males should earn more due to differences in their observable characteristics, while there is also evidence that they face barriers to advancement to senior positions, or a glass ceiling.
Published: October 2019