The role and extent of sexual orientation discrimination is the focus of a growing body of literature in economics and in other social sciences, across a wide range of social domains. This work aims at providing a holistic approach to the assessment of lesbian, gay and bisexual (LGB) people's life experience by developing a synthetic index of social inclusion. This is obtained by aggregating several variables pertaining to the following domains: monetary poverty, labour market attachment, housing conditions, subjective well-being, and education. We focus on the case of Italy due to the availability of a peculiar dataset that allows us to distinguish LGB people who are open about their sexuality and those who choose not to declare it. The empirical analysis highlights a lower level of inclusion of individuals in same-sex couples that cannot be explained by other observable characteristics. Thus, it may denote a lack of equal opportunities and a need for adequate inclusion policies. Being publicly open about one's sexuality is found as a crucial correlate of the welfare of LGB people, to an extent so far neglected by the literature.
Improved availability of statistical data on the gay and lesbian population is resulting in a growing production of studies on sexual orientation and gender identity discrimination. The bulk of the economic literature on these topics focuses on the labour market, investigating three main fields of potential discrimination: firms’ human resources policies, work conditions and average earnings (for a recent review see Klawitter, 2012). However, works in the other social sciences have documented a substantial risk of discrimination of lesbian, gay and bisexual (LGB)1 people in several other domains, such as family law, social policies, housing, health and healthcare, education and training. This work attempts at integrating as many of these fields as possible, with the aim to provide a holistic and synthetic approach to the assessment of LGB people's social life experience.
Discrimination, especially in the labour market, has become an established field of research for economists since at least Becker (1957). Discrimination may result in poverty, which for LGB people was investigated by Albelda et al. (2009) and Badgett, Durso, and Schneebaum (2013) for the case of the USA. However, theoretical and applied research originating from the seminal works by Amartya Sen (e.g. Sen, 1999) has shown the crucial need to adopt an integrated view of an individual's or a group's functionings in several domains, beyond earnings or the labour market, in order to adequately grasp their well-being (Chiappero-Martinetti and Moroni, 2007). Following the terminology adopted by the European Union institutions, in this work we develop a quantitative analysis of “multidimensional deprivation” but, as recommended by the Indicators’ Sub-Group of the Social Protection Committee of the EU, we interpret it as an indication of individuals’ “social exclusion”, defined as the individuals’ (in)ability to fully participate to societal life.
We use a fuzzy set definition of social inclusion, conceptualising it as a continuous rather than a dichotomic variable. We thus develop a synthetic index of inclusion/exclusion as well as a number of partial indexes, composed of several variables pertaining to the following domains: education, monetary poverty, labour market inclusion, housing conditions, and subjective well-being.
We focus on the case of Italy due to the availability of a peculiar dataset, the Bank of Italy's Survey on Household Income and Wealth (SHIW) that allows us to distinguish LGB people who are open about their sexuality from those who choose not to declare it. Such distinction had been mostly ignored by the applied quantitative literature thus far, especially in the economic field, with few exceptions.2
Our analysis highlights a lower level of inclusion of individuals living in same-sex couples, which cannot be explained by other observable characteristics and may thus be presumably attributed to the potential impact of discrimination. Such evidence may constitute a case for equal opportunities policies aimed at eradicating discrimination and establishing a level playing field and a more equal society.
However, one of the main results of our analysis concerns the relevance of the above-mentioned internal bipartition of the LGB population between “out” and “closeted” LGB people. Individuals who are not open about their sexuality appear to suffer from a significantly lower level of social inclusion, especially in those domains that can be measured by objective variables. Such result implies two main consequences. In terms of policymaking, it highlights being publicly open about one's sexuality as a crucial correlate of the welfare of LGB people, and accordingly the need for tailored measures recognising the differences internal to the LGB population which is not a homogeneous group, beyond the more frequently considered differences between gay men and lesbians. Concerning applied research, it implies that several extant quantitative studies, in so far as they ignore such crucial variable, may have produced biased results.
The paper is structured as follows. In Section 2, we describe the dataset and the procedure adopted to identify out and closeted LGB individuals. Section 3 summarises the main literature on the social inclusion of LGB people and presents descriptive statistics of our sample, while developing precise hypotheses on the economic impact of sexual orientation discrimination. In Section 4, we describe the methodology used to develop a synthetic measure of social inclusion and in Section 5 we provide evidence of the impact of sexual orientation on it. Section 6 concludes.
