The Economic Cost of Exclusion in North Macedonia and Serbia are the first two reports in a series of studies providing new data on key labor market indicators for lesbian, gay, bisexual, transgender, and intersex (LGBTI) people and their experiences of labor market discrimination and exclusion, along with an estimate of the resulting economic impact. The studies estimate that the annual economic loss due to SOGIESC-based exclusion totals 0.5 % of the GDP of both North Macedonia and Serbia. In addition, the research estimates the annual fiscal loss totals approximately 0.1 % of the 2021 GDP in the Republic of Serbia and 0.13 % of the GDP in North Macedonia.
Around the world, LGBTI people face discrimination and exclusion which may limit their ability to reach their full potential in different areas of life, including education, employment, physical and mental health. As recent research suggests, the effects of stigma, discrimination and exclusion based on sexual orientation, gender identity and expression, and sex characteristics (SOGIESC) could be costing economies billions of dollars. However, quantifying such cost is hampered by a lack of nationally representative data about LGBTI people in most countries. Thus, the main objective of this research initiative is to provide data on the position of LGBTI people in the labor market and estimate the economic cost of SOGIESC-based exclusion for different countries. To estimate the cost of exclusion, two theoretical models focused on the labor market and related issues were developed. Research findings and recommendations offer evidence and guidance for advancing the inclusion of LGBTI people and complement the existing human rights discourse.
Two theoretical models are developed to quantify the economic and fiscal losses that result from excluding LGBTI people from the labor market. The first model estimates the accumulated wage losses due to the consequences of exclusion, including reduced wages due to the inability of employed LGBTI people to use their human capital to the maximum, increased unemployment and associated wage losses, and reduced labor force participation or increased inactivity of LGBTI people and associated wage losses. The second model takes into account the negative effect of exclusion on accumulated fiscal revenues (due to lower income and payroll taxes) and expenditures (due to higher expenditures for unemployment benefits and active labor market programs).
Bearing in mind that LGBTI people’s experiences with workplace discrimination and exclusion are likely not uniform, which can be reflected in economic losses, self-reported experiences of discrimination and stigma in the workplace are taken into account when estimating the costs of SOGIESC-based exclusion.
To implement the theoretical models and avoid any factors that could affect the results, nearly identical online surveys on key labor market characteristics of the general population and the LGBTI population were conducted.