Transgender individuals have lower employment

Transgender individuals have lower employment rate and often earn lower salaries than others. This is shown in a dissertation from Jönköping International Business School (JIBS) at Jönköping University. The dissertation highlights how sexual orientation and gender identity affect careers, business survival, and wealth patterns in Sweden.

The share of individuals identifying as LGBTQ+, meaning lesbian, gay, bisexual, transgender, queer, and other identities, is steadily increasing in society. Surveys indicate that nine percent of adults worldwide identify as LGBTQ+, with as many as 18 percent among “Generation Z” (people born around 1995-2010). The increasing proportion of LGBTQ+ individuals underscores the need for more research, particularly in economics. The aim of the dissertation, written by Erwan Dujeancourt, an affiliated researcher at JIBS and Stockholm University, is to explore the role that gender identity and sexual orientation play in labor market disparities, entrepreneurship, and wealth.

Three out of five transgender people out of work

The study looked at the role of legal gender change on individuals in the labor market. It studied a cohort of more than 900 transgender individuals in Sweden who changed their legal gender between 2013 and 2020, using population register data. These were compared with their cisgender siblings with the same level of education (a cisgender person is someone whose gender identity corresponds to their sex assigned at birth). The study shows that transgender people find it harder to secure employment. Three out of five transgender individuals are out of work, with transgender women facing the greatest challenges, particularly after legally changing their gender.

"To date, very few studies have been made on how transgender individuals fare in the labor market, largely due to lack of data. Using Swedish administrative data was an opportunity for me to start addressing this research gap and explore how the outcomes may differ for transgender men and women. In Sweden, I find a significant gap in employment. The results suggest that equal skills and education does not mean equal hiring opportunities for transgender individuals." says Erwan Dujeancourt.

When it comes to labor income, transgender men earn on average 35 percent less than their cisgender siblings. Transgender women, on the other hand, have a 21 percent higher labor income but face greater challenges in job searching and have lower employment rates after legally changing their gender. According to Erwan Dujeancourt, these findings highlight the vulnerable economic situation of transgender people in Sweden.

More likely to have multiple jobs

The dissertation also examines the difference between sexual minorities and heterosexuals in the labor market regarding how common it is for different groups to have multiple jobs. The results show that sexual minority men are 29% (eight percentage points) more likely to hold multiple jobs compared to heterosexual men. For women, the figure is 12% (three percentage points).

The results suggest that sexual minority men take on more jobs to prevent unemployment. However, the research also shows that the differences are not solely about having a safety net. Sexual minority individuals are less likely to have low-skilled extra jobs and more likely to have high-skilled extra jobs. For women, research suggests that sexual minority women take on more jobs to change careers and industries. This suggests a pursuit of career advancement and professional development opportunities.

"According to the World Economic Forum, nearly 25% of jobs will undergo significant changes over the next five years due to technological advancements, including artificial intelligence, and the shift towards a greener global economy. Millions of jobs are expected to be created and destroyed in the near future. At the onset of this global disruption, this research on economically vulnerable populations shows that holding multiple jobs can act as a safety net against unemployment, help career and industry changes as well as support career development. However, to mitigate the potential drawbacks of holding multiple jobs, it is crucial to make efforts to ensure a healthy working environment." says Erwan Dujeancourt.

Differences in entrepreneurship and business survival

The dissertation also highlights significant differences in entrepreneurship and survival rates for businesses founded by individuals belonging to sexual minorities. Men in this group were less likely to be entrepreneurs compared to heterosexual men, while women in sexual minorities were more likely to be entrepreneurs than their heterosexual counterparts. Additionally, the study found that businesses founded by sexual minority women had lower survival rates than comparable businesses founded by heterosexual women.

"There is a significant global debate surrounding the implementation of gender and minority quotas in corporate boards. For example, some US policymakers advocate for quotas to empower minority individuals and break through glass ceilings. However, others question whether there are any disparities in entrepreneurship and performance for sexual minority individuals. In our research, we observe a glass ceiling for sexual minority male entrepreneurs. Interestingly, we find that the performance of firms owned by sexual minority women has improved in areas where attitudes towards LGBTQ+ individuals are less negative. These findings suggest that communities become more tolerant and inclusive, small businesses are better positioned to thrive and generate employment opportunities.” says Erwan Dujeancourt.

Gay wealth gap

Economic differences between siblings in same-sex and heterosexual relationships are another focus of the dissertation. Sexual minorities face lower homeownership relative to their siblings. Moreover, a significant share of sexual minority individuals have a net wealth penalty. Differences in income do not explain this gap between siblings. However, the research shows that living in more urban and tolerant areas and having more education have a positive role on real estate, financial, and net wealth for sexual minority men.

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