Wage equation misrepresents gay wage discrimination: overlooked evidence from Russia

Abstract

PurposeOnly data from developed countries were used to estimate the sexual orientation difference in wages. This paper is the first, which aims to identify the wage discrimination of gay men in Russia – a country where institutional discrimination and ignorance against gay men are known to present.Design/methodology/approachGays are identified as men who reported having sex with other men in several waves of the national household survey. A wage equation is used to estimate the gay wage penalty. Extending the wage equation to implement a difference-in-difference design, the paper also evaluates the effect of the gay-propaganda law of 2013 on gay wages.FindingsNo wage discrimination is identified. The law also has no adverse effect on gay wages.Practical implicationsCross-country comparison and theoretical generalizations are premature, and better identification strategies are needed to understand sexual orientation differences.Social implicationsPolicymakers should be aware that in both discriminatory and equitable environments, there may be hidden inequality even if researchers do not detect it.Originality/valueThe findings are implausible and add to existing evidence that gay discrimination measured with wage equation suffers from endogeneity and should be interpreted with caution. Particular caution should be exercised in cross-sectional and time-series comparisons, as a tendency to report the orientation honestly and unobserved confounders vary by location and time.