What Drives the Gender Gap? An Analysis Using Sexual Orientation

Abstract

Summary Gender differences in productivity, if any, that are unobserved to researchers may produce an omitted variable bias in gender gap studies. Finding a subpopulation with less acute differences in unobserved characteristics would allow this concern to be addressed. This paper shows that gays and lesbians are one such interesting group—for the intra‐household division of labor and its effects on market productivity cannot be sex‐determined in this subpopulation. Indeed, there are substantial intra‐household variations in labor market outcomes and other characteristics; the patterns and magnitudes are similar to different‐sex households. Simultaneously, the gender wage gap between gays and lesbians is much smaller than in the heterosexual population; in specifications that control for geographic location it is near zero. These findings suggest that the intra‐household division of labor is an important factor driving gender differences in labor market outcomes. Such an interpretation is consistent with recent studies that control for productivity.

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