Sexual Orientation Wage Gaps across Local Labour Market
Contexts: Evidence from Canada

Mounting evidence suggests that sexual orientation matters in the labour market.
Research in Canada points to a wage hierarchy not only by gender, but also by
sexual orientation, with heterosexual men out-earning gay men, lesbians, and
heterosexual women. While previous work has considered how human capital
characteristics, occupation and industry of employment, and family status factor
into the creation of these earnings disparities, little research has examined how
residential concentration in large metropolitan areas factors into the creation of
sexual orientation pay gaps.

Drawing on the 2006 Census of Canada, this study investigates how sexual orientation
wage gaps vary across geographic areas in Canada, documenting earnings
disparities across the metropolitan/non-metropolitan divide as well as for Toronto,
Montreal and Vancouver. We also evaluate whether the mechanisms contributing
to wage gaps diverge across these contexts, focusing on how pay gaps differ across
occupations, points in the earnings distribution, and sectors of employment.

Our results show that pay gaps are highest in non-metropolitan Canada. The
underlying components of wage gaps fluctuate across Canada, especially for gay
men. Sexual orientation earnings penalties are reduced in public sector employment,
even where private sector wage gaps are highest. These results suggest that local
social and labour market contexts are associated with the earnings outcomes of
sexual minorities.

Keywords: sexual orientation, earnings, labour markets, occupations, public sector.