Politics and Geopolitics Research

John G. Matsusaka. 2018/05.

"The cross-country regression results reinforce this argument, showing that GDP per capita is higher in countries that have more legal rights for LGB people... LGBT inclusion and economic development are mutually reinforcing to each other. Exclusion of LGBT people causes harms to the economy... LGBT people face multiple barriers to physical and mental health... Not only are these violations and forms of exclusionary treatment harmful to the individuals involved, they also carry costs that impact the broader economy. These economic costs include lost labor time, lost productivity, underinvestment in human capital, and the inefficient allocation of human resources through discrimination in education and hiring practices. The decreased investment in human capital and suboptimal use of human resources in turn have the potential to reduce overall economic output and growth in a direct way."

"Measures of the percentage of the population of high-income countries identifying as LGB suggest prevalence rates of 3–4%... Studies of same-sex sexual activity, an alternative measure of sexual orientation, among men in low- and middle-income countries suggest the prevalence rates could be 3–20%, or double the LGB identity rates... Here [in this study] we choose 4% as a low to mid-level prevalence estimate for the adult population and potential labor force... if all LGB people were equally productive but all were prevented from contributing to the economy because of unemployment or the inability to work for health or other stigma-related reasons, the negative impact of LGB exclusion would cost a country approximately 4% of its GDP... we can derive an estimate from Klawitter’s (2015) meta-analysis that LGB people are 10% less productive because of exclusion. She found that gay and bisexual men in high-income countries earned 11% less than similarly qualified heterosexual men. That wage difference could be a proxy for lost productivity if discrimination keeps gay and bisexual men out of more productive jobs that they are qualified for. For women, Klawitter finds that lesbian and bisexual women earn on average 9% more than heterosexuals..."