Transgender self-employment outcomes: evidence from the USA

Transgender persons are subject to strong stigma in society and the labour market. Transgender persons may therefore view self-employment as an opportunity to escape labour market inequalities. However, the rate of transgender self-employment, when compared to equivalent cisgender persons, has not been explored in previous research. Therefore, this article uses a large nationally representative dataset from the USA to examine differences in self-employment and incomes between transgender and cisgender persons. The main research technique uses Kitagawa-Oaxaca-Blinder style decomposition to explain differences in mean self-employment rates and incomes between cisgender men and other gender groups. The findings show that transgender persons are less likely than cisgender men, but more likely than cisgender women, to be self-employed. Transgender people are also likely to earn less than cisgender persons, but in terms of income from self-employment only, transgender people are no better or worse than self-employed cisgender men. There is some evidence that self-employed transgender men are more likely to be in the highest income category than self-employed cisgender men. Some of the self-employment and income gaps could not be explained by sociodemographic characteristics and, therefore, may be due to differences in unobserved characteristics or potential discrimination. The findings in this article provide important and previously unavailable evidence on differences in self-employment outcomes between transgender and cisgender persons. Plain English Summary Transgender persons may choose self-employment to avoid potential discrimination in the labour market. The results from this analysis find that transgender persons are less likely than cisgender men, but more likely than cisgender women, to be self-employed. In terms of income, transgender people are also more likely to earn less than cisgender persons, while self-employed transgender persons are no better or worse off than self-employed cisgender men. Further analysis of self-employment and income gaps indicates that some of the difference in self-employment and income outcomes may be due to sociodemographic characteristics, but equally it may be due to potential discrimination experienced by transgender persons. These results provide context for further research in transgender experiences in self-employment and for appropriate public policy considerations to reduce economic inequality and societal stigma towards one of the potentially most marginalised groups in the USA.