Lee Badgett is an economist and a Professor at the University of Massachusetts Amherst. She works on labor economics and discrimination. She focuses on LGBT people and she kindly accepted to talk about her field and her new book The Economic Case for LGBT equality. Why fair and equal treatment benefits us all with us.
Lee Badgett, your new book The Economic Case for LGBT equality. Why fair and equal treatment benefits us all was published last year (1). Before diving deeper into the results, can you tell us more about your methods and how you compute the result you came up?
The book draws on a lot of different kinds of academic research, some of which I have done but most of which other people have done, because I am trying to pull together strands from a lot of different fields to make a case for an idea. That idea is that it is costly for us to have discrimination and exclusion in education, unemployment and health in particular, but in lots of other areas too. A lot of those studies are looking at surveys of LGBT people and comparing their experience to non-LBGT people. In economics you might look at the levels of incomes and wages, and try to control for other things that matter for income and wages, to see if there is any average difference leftover related to sexual orientation and gender identity. Similar kinds of things are done in the health realm to look for health disparities, analyzing survey data and again looking to see if there are certain conditions that LBGT people are more likely to have after taking into account everything else that may relate to that.
On the education front, the surveys that most of the studies use are a little bit different: they are mostly taking samples of LGBT students from different parts of the world and asking them their experiences of bullying, discrimination, that sort of thing.
There is a chapter on businesses which follows businesses after they enact certain kinds of more inclusive policies to see what their financial outcomes might look like.
And then I take all of that and turn it in into a rough estimate of how much those kinds of differences would make in an economy at a macro level.
I do that two ways, one I build that up, taking a few countries and look at how much this disparity, in particular health disparities, costs the economy in terms of the lost effort of LGBT people who would otherwise be healthy and working. And there is a rough estimate we can have of the impact of workplace discrimination.
So I tried to build that up and that is where I came up with that 1 percent figure that I talk about in the book: the economy loses around 1% of its economic output in the countries that I looked at: India and the Philippines, and other people have looked at Kenya, South Africa and they have very similar results. The second way is to compare countries with the same levels of education and capital stocks but different kinds of laws and attitudes towards LGBT people. We look to see if there is a correlation in having more acceptance or more legal inclusion and having a higher GDP. I do find a very positive correlation even after you take into account those other variables so it does look like that countries that are more inclusive do better economically in general.
But for instance regarding this positive correlation between wealth and lgbt inclusion, what does it say ? Do countries become more inclusive as they grow wealthier or they can become wealthier by being more inclusive.
That is the hardest thing to separate out. I think both are probably happening. In the process of computing the 1% estimate that I have just mentioned, I think you can make a case of the positive effect of inclusion on national income. Political scientists do argue that the correlation goes the other way. As countries become wealthier they are less concerned about subsistence and become more open to other ideas, post material values, questions of moral and sexual values, etc. As individuals do not have to struggle for subsistence, advocacy organisations can also exist. There is also more importance given to individual human rights. There is the same argument for womens’ rights. Thus, I think it goes both ways and it is a self reinforcing cycle.
LGBT inclusion may also attract investors or tourists from abroad.
Yes, I have heard this argument. My argument is about formation of human capital while this argument is about movements of capital and investment. There is one study on that (2). This argument assumes that people can move and prefer to live in places where diversity is accepted. This seems evident for LGBT people who prefer to live where they are accepted, but for non-LGBT people, this can be the case as well.
Both arguments make a lot of sense, and we are still developing evidence for that. The reason why I did not study these elements is that if a firm creates a new plant in India because homosexuality there is not criminalised anymore rather than in a country where homosexuality is criminalised for instance, this is good for India and bad for the other country. But the net effect on the world’s wealth is identical if you move from a country to another. I think the human capital argument affects the economy as a whole, the world’s wealth as a whole. But this argument of investment and attractivity is interesting for local policies, in tourism for instance.
How were you able to have this data in the US and in other countries you mentioned? How did you also take into account the permeability and fluidity of these categories?
In countries that have and use these forms of identity, these labels, and have these communities that use these labels as something to form around to use politically to argue for rights, I think those identities are things that people do recognize in a survey question. So people who think of themselves in at least some contexts as lesbian or gay or bisexual or transgender will not only be able to answer those questions on surveys but increasingly get upset if they don’t have that opportunity to answer these questions. They feel like they are not included on surveys if there is no question that allows them to say what their sexual orientation is or to not have an option to say what their gender identity is.
In the US, the UK, and Canada, where there are questions on sexual orientation and gender identity on a lot of surveys, they spend a lot of time, money and energy evaluating those questions. Here is the problem : when heterosexual persons see some of these questions, sometimes they never thought about these issues. They do not know the terms so they may be confused. So you have to construct questions ironically that are intelligible not only to the relatively small group of LGBT people, but to everybody, and that is the hard part. It is that everybody else needs to know not to put themselves in the wrong boxes. So it is complicated but it can be done, and we probably get data on sexual orientation as good as the data we get on other kinds of variables like income. Income is a very sensitive question in the US. A lot of people will not tell you what their income is on a survey, so we actually have a higher rate of nonresponses for income questions than we do for sexual orientation questions or gender identity questions. So, people can see that. The problem in France is that you cannot include these questions, it is not that they don’t want to answer them.
This is due to the idea of universalism and universal subject. Anytime you begin to highlight any difference, like race, religion, sexuality, gender, etc. you just directly are labeled as communitarian and you are not a scientist anymore but a militant. So it is very difficult to construct these datasets since there is no political will to do so.
Well there are two ways you could address that. You could do private surveys. We do that in the US for some things. We are not allowed to ask questions about religion in government dataset, but you can ask them on a private poll or survey. And then, in France there are some data on same sex couples because of family status questions. Having a same sex partner is not an identity per se, but we could use that to try to understand at least that subgroup in the LGBT population. We can learn what their lives are like, and that data has been analyzed by some french sociologists that I know of.
Such datasets can be constructed and do you think they should be or must be constructed to address questions on inequality or is it possible to do without them ?
We live in a world that is increasingly ruled by data. If you are to make a claim about a particular life situation LGBT people face -for instance, if they are poorer than average, etc– then you need data. Individuals can tell their stories, but this is not data that can show income inequality.
To tackle LGBT inequality issues with policies, it is also important to evaluate the effects of policies. To do that, it is necessary to have data at the beginning of an intervention (like a policy) and data after the intervention. This is what we are promoting with United Nations Sustainable Development Goals and the LGBTI Inclusion Index. There is an effort to encourage countries to collect data to address questions on LGBT issues and to measure inclusion. This would enable them to have a better view on what problems are and how serious they are. It is possible, even in France. This is a question of political will.
Yes your book also tells us a little bit about the world we are all living in and how data is important because it shows that it is not enough to just think about inequality in a moral sense, you have to make an economic case for equality and show that it benefits us all. It is interesting that you bring that point but it is also a bit sad to have to make an economic case for inclusion when it should just be a moral problem. Is this the only way for LGBT people to call for the attention of non-LGBT people, to make an economic case ?
Yes that is a great point. I guess I think about it this way: you don’t have to choose one argument; you can have both of them and both are very good arguments in my opinion. I agree that the human right and moral argument for equality is the one that is probably the best one. Maybe the economic case has some advantages. For one thing, I think any argument that makes people realize how connected we are is a good thing. I could have written this book about the health case for LGBT equality – except I’m not a health scholar, but you could make exactly the same case: we would all be healthier. The pandemic shows how true that is, we can give each other this disease. It can potentially kill people and it has killed many people and made others very ill for a very long time. We can reduce that by just taking some simple precautions to protect ourselves and protect other people too, and we can get vaccinated now and develop herd immunity where not everybody has to be vaccinated. But if enough of us do we would all be better off. But just my getting vaccinated and no one else getting vaccinated isn’t really gonna protect me all that well. So I think those sorts of arguments are important. Tt is something we have to remember: we are part of a society and we are connected to each other.
But mainly the economic case is something that speaks to people in institutional locations that can be very influential in the lives of LGBT people but business is not primarily there to protect people’s rights. We need to push them to do that but that is not their reason for being. If you can convince them that they can get some kind of reward for doing these, things then they would be more likely to do it. So for businesses you need a business case for equality. Sometimes they really believe it, and there is a good evidence that it is true, but you have to make those arguments to convince their shareholders or other employees who do not agree
The World Bank is not supposed to be a political institution, and human rights are seen as being kind of political. So in order for them to care about LGBT people internally, it became clear that you have to convince them that it is related to their vision, about reducing poverty and sharing prosperity. How do you do that? You can do that with an economic case: you can show that you are going to help economies to grow. For development banks and government agencies with the same focus on finance or labor, whatever their focus is, an argument rooted in economic growth is more likely to be listened to than human rights arguments. I know this because I have talked to a lot of people in those worlds, but also because activists have told me: we need an argument like this because so many people that we talk to, maybe they do think human rights are important but they do not see that as an issue for LGBT people, so you have to make a different kind of case. So having this other way of looking at this helps to to put it on the agenda, to open doors and hopefully to make some change and to promote more inclusion in those places.
Regarding the costs of LGBTQI-phobia that you deal with in your book, it is quite straightforward that LGBT people benefit from equality. But do straight people benefit from that ? and How?
Yes, although it may not be direct. If GDP goes up with more inclusion, then everybody could benefit. But let us take a direct example. Years ago, North Carolina passed a bill known as the bathroom bill. This bill basically required discrimination against transgender people. They could only use bathrooms corresponding to the sex they were assigned to at birth. There has been a lot of conflict over this. And for instance, Bruce Springsteen planned to give a concert in North Carolina and he decided to cancel this concert as a reaction to the bill. This has resulted in economic losses. And most people who would have benefited from Bruce Springsteen doing its concert (people working there to organise it, restaurants for people to eat before the concert, etc) were cisgender people
If you think from a macro perspective, one could also say that if LGBT people are more included and become wealthier or less poor, they consume more and produce more then this creates more income for the rest of the population, including straight people, too.
- Badgett L. 2020. The Economic Case for LGBT Equality: Why fair and equal treatment benefits us all. Beacon Press.
- Noland M. 2005. “Popular Attitudes, Globalization, and Risk.” International Finance Vol. 8, No. 2, pp. 199–229.