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December 12 , 2014

LGBT rights: Good for the economy

Los Angeles--Countries that protect the rights of their LGBT citizens show greater increases in their gross domestic product than ones that do not, according to a new article by M.V. Lee Badgett, first posted in New America’s Weekly Wonk online magazine.

Badgett points to two studies she headed, one for the World Bank and another for the Williams Institute at the UCLA Law School, both of which back up the claim.

The World Bank research was a case study of the cost of homophobic policies in India, estimating the cost of homophobic policies at as much as 1.7 percent, although Badgett notes that, without a concrete estimate of the LGBT population of the nation, more exact economic figures are not possible.

The preliminary data from India indicates that 56 percent of white-collar LGBT workers face discrimination, and over a quarter of lesbians living in urban areas faced violence within their family.

Two-thirds of Kothis, or feminine men who are the passive partners in sexual relationships, had incomes below $70 a month, and two-thirds of men who have sex with men in Chennai earn less than $1.50 a day.

These lower wages, as well as lost wages because of incarceration or the inability to find a job because of discrimination, could cost the Indian economy anywhere between $1.25 billion and $7.7 billion, depending on estimates of the number of LGBT people in the workforce.

Health disparities between LGBT and heterosexual, cisgender employees in India account for between $712 million and $23.1 billion in health costs.

Badgett points out that, with current data, costs to the Indian economy from education, emigration and other factors cannot be determined.

The other study she cites, a November 2014 paper from the Williams Institute and the United States Agency for International Development, backs up that thesis on a larger scale.

“The macro level analysis reveals a clear positive correlation between per capita GDP and legal rights for LGB and transgender people across countries, as measured by the Global Index on Legal Recognition of Homosexual Orientation (GILRHO) and the Transgender Rights Index (TRI) respectively,” Badgett and the other researchers write. “The simplest  correlation shows that one additional right in the GILRHO (out of eight rights included) is associated with $1,400 more in per capita GDP and with a higher HDI value. In other words, countries with more rights for LGBT people have higher per capita income and higher levels of well-being. The positive correlation between LGBT rights and the HDI suggests that the benefits of rights extend beyond purely economic outcomes to well-being measured as educational attainment and life expectancy.”

They find about a $320 per capita increase in GDP for each right, with anti-discrimination laws having “an especially strong correlation with GDP per capita.”

Badgett acknowledges in the Weekly Wonk article that there is another interpretation for the data, that countries that have higher increases in gross domestic product are more likely to offer LGBT protections.

“Another explanation for our findings is that countries may become more concerned about minority rights as the country gets richer and less worried about economic subsistence,” she wrote. “The 39 growing countries we studied averaged one right for GLBT in 1990, but the average was more than three rights by 2011.”

The USAID and Williams Institute study examined 39 countries in the Americas, Africa, Asia and Europe from 1980 to 2014.










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