“Born This Pay”: Investigating Wage Disparities Based on Sexual Orientation in the German Labor Market (Master Thesis)

Abstract

This study investigates the impact of sexual orientation on earnings in the German labour market. Using data from the Socio-Economic Panel survey from the year 2020, I analyse wage differentials between heterosexual and non-heterosexual workers. The findings reveal that nonheterosexual men earn approximately 7.7%less than their heterosexual counterparts, while lesbian or bisexual women experience a 4.22% income premium, though statistically insignificant. Further analysis focusing on European-born full-time workers confirms these trends, although with reduced statistical significance. Oaxaca-Blinder decomposition highlights factors contributing to the wage gap, with discrimination and occupational sorting being the main drivers behind the wage disparities. Furthermore, this study emphasises the need for further research and policy interventions to address labour market inequalities of this kind.