The Economic Impact of LGBT

Exclusion
M. V. Lee Badgett
University of Massachusetts Amherst
Williams Institute, UCLA

August 2015

Should Society
Accept
Homosexuality?

Source: Pew Research

Global Attitudes Project

Israel
47
40
finds
Lebanon
80 18
Turkey accepting of78
n North
9
Relatively
homosexuality
Should
Society
Accept
Palest. ter.
93
4
uch of
Egypt
95
3
Homosexuality?
Should
Jordan Society Accept Homosexuality?
97
3
d
Tunisia
94
2
ations
No Yes
Asia/Pacific
iaN.
andAmerica
in
Australia
18
79
ty of Canada Philippines
26
73
14
80
Japan
36
54
land andU.S. S. Korea
33
60
59
39
China
Malaysia
Indonesia
Pakistan

Europe
been fairly
Spain
h Korea,
Germany Latin America
Argentina
the
Czech Rep.
Chile
Mexico
uld beFrance
Brazil
east tenBritain Venezuela
Bolivia

57
86
93
87

11
11
21
16
24
30
22
36
42
18

49

21
9
3
2

88
87
74
80
68
61
77
60
51
76
43

Source: Pew Research

Global Attitudes Project

Philippines: Tolerant of neighbors

% would not want homosexual neighbor
80
70
60

Philippines

China

50

Taiwan

40

Malaysia
Singapore

30

Thailand

20
10
0

2005-2009

2010-2014

World Values Survey

But most believe homosexuality is

morally unacceptable
US

37%

Philippines

23%

65%

Unacceptable

Acceptable

35%

25%

Not moral issue

Source: Pew Research Center Global Views on Morality

9%

Crossnational
Country

Employer

Person

Social Exclusion

Individual-level outcomes

Economy-level outcomes

Less education
HOMOPHOBIA

Violence
Prison

Lower productivity

Job loss
Discriminatio
n

Family
rejection
Harassment
in school
Pressure to
marry

Higher health care

& social program
costs

Lower earnings,
more poverty

Lower
economic
output

Poorer health, shorter

lives

Fewer incentives
to invest in human
capital

Lower labor force

participation

Social Exclusion

Individual-level outcomes

Economy-level outcomes

Less education
HOMOPHOBIA

Violence
Prison

Lower productivity

Job loss
Discriminatio
n

Family
rejection
Harassment
in school
Pressure to
marry

Higher health care

& social program
costs

Lower earnings,
more poverty

Lower
economic
output

Poorer health, shorter

lives

Fewer incentives
to invest in human
capital

Lower labor force

participation

Crossnational
Country

Employer

Person

[Discriminatory laws] can

Hewlett-Packard
impede
business
Google to
Intel efforts
Barnes & Noble
Microsoft
recruit, hire,
and
retain
the
best
Verizon
Apple
Clorox
Aetna
workers in an environment that
Office Depot
Morgan Stanley
Nike
Viacom
enables
them
to
perform
at
Xerox
McGraw Hill
their
best.
Facebook

LGBT-supportive policies and workplace climates

generate economic benefits for employers
Greater job
commitment
Improved health
outcomes
Increased job
satisfaction
More openness
about being LGBT
Improved workplace
relationships
Less discrimination
Increased
productivity

16

1 2

14

11
1

8
3

11

3
1

Positive business relationship

No business relationship
Negative business relationship

Crossnational
Country

Employer

Person

Social Exclusion

Individual-level outcomes

Economy-level outcomes

Less education
HOMOPHOBIA

Violence
Prison

Lower productivity

Job loss
Discriminatio
n

Family
rejection
Harassment
in school
Pressure to
marry

Higher health care

& social program
costs

Lower earnings,
more poverty

Lower
economic
output

Poorer health, shorter

lives

Fewer incentives
to invest in human
capital

Lower labor force

participation

World Bank Case Study:

Cost of LGBT Exclusion in India
The model can estimate:
Lost productivity caused by discrimination
in workplace
Impact of family constraints on decisionmaking about labor force participation
Cost of health disparities: HIV, depression,
suicide

Crossnational
Country

Employer

Person

Compare countries
(USAID & Williams Inst. 2014)

Inclusion
Index of legal
rights
(GILRHO)

Economic
outcomes
GDP per capita,
Human Dev
Index

Positive correlation of rights with GDP

per capita, 2011
30

Taiwan

GDP per capita (Thousands USD)

25

Czech Rep.

20
Poland

Russia
15

Turkey

Thailand

Peru

China
Ukraine

Egypt
Indonesia
Morocco India
Pakistan
Kenya

Serbia

Brazil
South Africa

Colombia
Ecuador

Albania

Bosnia & Herzegovina

Guatemala
Honduras
Nepal

Mexico

Venezuela

Philippines
El Salvador

Argentina

Romania
Bulgaria

Malaysia

Hungary

Lithuania

Latvia

Chile
10

Estonia

Global Index on Legal Recognition of Homosexual Orientation

Transgender rights positively

correlated with GDP per capita 2011
20
18

Poland
Russia

GDP per capita (Thousands USD)

16
Turkey
14

Chile

Argentina

12
Serbia

10

Venezuela
Brazil
South Africa

Thailand
8
Bosnia-Herzegovina

Ecuador

6
Egypt

India

Philippines

2
Kenya
El Salvador

8
Transgender Rights Index

10

12

14

Econometric findings

One additional
right

+ $320 GDP
per cap (3%)

Human capital &

economic potential

Post-materialist
demand for human
rights

LGBT INCLUSION

Strategic
modernization

Achievement of
capabilities

ECONOMIC
DEVELOPMENT