Recent research suggests that the effects of stigma, discrimination, and exclusion against lesbian, gay, bisexual, transgender, and intersex (LGBTI) people could be costing economies billions of dollars.
There are numerous reasons for these costs, including adverse educational environments, employment discrimination, physical and mental health disparities, and violence. Stigma and discrimination may limit the ability of LGBTI people to reach their full potential and the ability of countries to maximize their human capital, even in societies that formally protect LGBTI people.
The primary objective of this report is to estimate the economic cost of exclusion based on sexual orientation, gender identity and expression, and sex characteristics (SOGIESC) in the Republic of Serbia and to provide the country’s policy makers, civil society, and development partners with new evidence on the ongoing policy dialogue on strengthening the social inclusion of LGBTI people. To estimate the cost of exclusion, this report presents two theoretical models focused on the labor market and related issues. The first model centers mainly on the accumulated loss of individual wages due to the consequences of exclusion, which can be divided into three groups: (i) LGBTI people who are employed but not able to use their human capital to the maximum, resulting in reduced wages, (ii) LGBTI people who do not have jobs but are actively seeking work, resulting in increased unemployment, and (iii) LGBTI people who gave up looking for a job and have left the active labor force, resulting in reduced labor force participation or increased inactivity. It is important to consider not only the direct economic losses from lower incomes and labor productivity, but also the related costs, such as decreased tax revenues and increased fiscal expenditures on active labor market programs (ALMPs) and unemployment benefits (UB). Therefore, the second model calculates the negative effect of exclusion on accumulated fiscal revenues (due to lower income and payroll taxes) and expenditures (due to higher expenditures for UB and ALMP). This study does not, however, aim to estimate the overall cost of exclusion, as for instance, it does not examine the disparities in health and education.
Analyzing the economic cost of exclusion in Serbia required the generation of new SOGIESC-disaggregated labor market data. Such data are largely absent in most countries, including in Serbia, and therefore generating this data itself represents an important contribution to further the inclusion of LGBTI people in that country. A representative survey of the general population and of a purposive sample of LGBTI people was conducted in late 2021/early 2022 to document wages and labor force participation, relying largely on the European Union Survey on Income and Living Conditions and the Labor Force Survey in the Republic of Serbia, which are regularly conducted by the Statistical Office of the Republic of Serbia. Among LGBTI people, self-reported experiences of discrimination and stigma in the workplace were also collected.
The main findings from the research suggest that among a wider population of people aged 60 or younger:
- The percent unemployed was higher among LGBTI people (17.5 percent) than the general population (7.2 percent), particularly among LGBTI people who experienced higher levels of workplace discrimination and stigma.
- Among LGBTI people, transgender and intersex people reported greater experiences of workplace discrimination than others.
- Wage losses were highest for LGBTI people who reported the most workplace exclusion, discrimination, and stigma.
- The annual economic loss due to SOGIESC-based exclusion totaled 31,171,000,000 RSD (US$293 million), or 0.5 percent of the 2021 GDP in the Republic of Serbia.
- The annual fiscal loss totaled 9,322,000,000 RSD (US$88 million), or approximately 0.1 percent of the 2021 GDP.
The proposed theoretical models and data collection effort provide a way to quantify the cost of SOGIESC-based exclusion and suggest that reducing stigma and discriminatory experiences among LGBTI people can have a significant positive impact on the economy. This would require, among other measures, the enforcement of existing legal protections against discrimination, a further strengthening of legal protections for LGBTI people in different fields (e.g., education, employment, health, private and family life, etc.), and reductions in the societal stigma faced by LGBTI people.