IZA DP No. 9382: Do Gays Shy Away from Competition? Do Lesbians Compete Too Much?
published as 'Sexual Orientation, Competitiveness and Income' in: Journal of Economic Behavior & Organization, 2018, 151, 191 - 198
It is an established fact that gay men earn less than other men and lesbian women earn more than other women. In this paper we study whether differences in competitive preferences, which have emerged as a likely determinant of labour market differences between men and women, can provide a plausible explanation. We conduct an experiment on a Dutch online survey panel to measure the competitiveness of gay, lesbian and straight panel members. For differences in competitiveness to partially explain sexual orientation differences in earnings, gay men would need to be less competitive than other men and lesbian women more competitive than other women. Our findings confirm this competitiveness hypothesis for men, but not for women. Gay men compete less than other men, while lesbian women compete as much as other women. Linking our experimental measure to survey data, we show that competitiveness is a significant predictor of earnings. Differences in competitiveness can account for a significant portion of the gay earnings penalty, but cannot explain the lesbian premium.