New Study Finds LGBT Inclusion Linked to Countries’ Economic Performance

LGBT inclusion and economic developmentLOS ANGELES— Greater inclusion of lesbian, gay, bisexual, and transgender (LGBT) people in emerging economies is positively associated with a country’s economic development, according to a study released today by the Williams Institute at UCLA School of Law and the U.S. Agency for International Development (USAID) and its partners in the LGBT Global Development Partnership. The findings suggest that LGBT equality should be part of economic development programs and policies.

“This research provides a new window into understanding the extent to which stigma and discrimination against LGBT people affect a country’s economy,” said lead author, M. V. Lee Badgett, Williams Distinguished Scholar and Director of the Center for Public Policy and Administration at the University of Massachusetts Amherst.

The study analyzes the impact of the treatment of lesbian, gay, bisexual, and transgender people on economic development in 39 emerging economies and other selected countries, and presents findings that demonstrate a link between LGBT rights and economic output. The study uses, for the first time, the Global Index on Legal Recognition of Homosexual Orientation (GILRHO, created by Dutch law professor Kees Waaldijk) which establishes eight categories of legal recognition and protection for lesbians and gay men. The study also uses a provisional index on transgender rights. The study finds:

• A positive correlation between per capita GDP and legal rights for LGB and transgender people across countries. Using a regression model to account for other factors that influence development, the relationship remains strong. One additional right in the GILRHO is associated with approximately $320 in GDP per capita, or about 3 percent of the average GDP per capita in the sample countries. An increase in GILRHO is also associated with a higher human development index (HDI) value.
• A steady increase in the level of rights of lesbians and gay men in emerging economies. On average, the countries in the study recognized one right relating to sexual orientation in 1990. By 2011, that number increased to over three rights according to the GILRHO.

The researchers also found substantial evidence in many countries that discrimination and violence against LGBT people create economic harms for individuals that also affect a country’s economic performance. For example:

• Police officers unjustly arrest, detain, jail, beat, humiliate, and extort LGBT people, taking LGBT people out of productive employment.
• LGBT people face disproportionate rates of physical and psychological violence, which can restrict someone’s ability to work because of physical injuries and psychological trauma.
• Workplace discrimination causes LGBT people to be unemployed and underemployed, which mean their full productive capacity is not being used.
• LGBT people face multiple barriers to physical and mental health, which reduces their ability to work and their productivity in the workplace.
• LGBT students face discrimination in schools by teachers and other students, which hampers their learning and reduces the development of skills and knowledge that benefit an economy.

“By showing the link that stigma and discrimination against LGBT individuals have to a country’s economic well-being, the issue of bigotry is not just understood by those who are LGBT, but for anyone who cares about that country’s economic growth,” said Claire Lucas, Senior Advisor for the U.S. Global Development Lab at USAID.

The researchers recommend further research and data development efforts in order to better understand the links between LGBT inclusion and economic development, some of which are possible with existing data and some which require the collection of new data. This study is a first important step as it shows one of the many factors relevant to increasing economic growth and human development, a priority of USAID and its programs.

“Including 21 countries where USAID works and drawing on systematic new measures of the legal environment, this research delineates the macro and micro-level costs of not having an LGBT-inclusive workforce,” said Stephen O’Connell, USAID’s Chief Economist. “The report documents a robust macro-level correlation between LGBT rights and economic development, operating within and across countries and controlling for other factors. The authors cite extensive evidence that at the micro level, causality runs from rights to incomes. The linkages explored here have potentially critical policy and programmatic implications.”

The study’s authors are M.V. Lee Badgett, Williams Distinguished Scholar and Director of the Center for Public Policy and Administration at the University of Massachusetts Amherst; Sheila Nezhad, former Public Policy Fellow at the Williams Institute; Kees Waaldijk, Professor of Comparative Sexual Orientation Law, Leiden Law School, The Netherlands and former McDonald/Wright Chair of Law, The Williams Institute; and Yana van der Meulen Rodgers, Professor and Undergraduate Director in the Women’s and Gender Studies department at Rutgers, the State University of New Jersey.


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