New Analysis Finds LGBTQ+ Households Trail in Income and Wealth

Data from the Federal Reserve Board and Census Bureau point to large gaps in financial outcomes between adults and couples who identify as lesbian, gay, bisexual, transgender and queer and/or questioning (LGBTQ+) and those who identify as straight and cisgender (individuals whose current gender identity matches their sex at birth). In this post, we document some trends in economic well-being between LGBTQ+ and non-LGBTQ+ adults. Our findings reveal that LGBTQ+ adults had fewer savings and investments and lower incomes. Data also indicate they were less likely to be homeowners.

Using the Census Bureau’s Household Pulse Survey (HPS), the Federal Reserve Board’s Survey of Household Economics and Decisionmaking (SHED) and the Survey of Consumer Finances (SCF),When using the SCF, we group survey waves 2013, 2016 and 2019 to get a large enough sample. SHED data are from 2021. For HPS, we group waves 41-48 collected in 2022. our research shows the following:

• Using HPS data, in 2022, 22% of LGBTQ+ adults had household incomes of less than $25,000 versus 14% of non-LGBTQ+ adults. LGBTQ+ adults were also less likely than non-LGBTQ+ adults to have household incomes of $100,000 or more (23% versus 31%).
• According to the SCF for 2013-2019, female same-sex couples had about $82,000 in median wealth, less than half the median wealth of mixed-sex couples.
• Using SHED data, in 2021, 65% of bisexual women had household savings and investments of less than $50,000. This was the highest share of any gender identity/sexual orientation group; by comparison, only 45% of straight women had less than $50,000 in household savings and investments.
• Also per SHED, fewer than half of LGBTQ+ adults (44%) were homeowners in 2021, compared with over two-thirds (68%) of non-LGBTQ+ adults.

LGBTQ+ Adults Have Lower and Less Stable Household Incomes

Income is one measure of financial stability, because people with higher incomes are better able to pay their bills on time and save for a rainy day. Using HPS data, in 2022, half of LGBTQ+ adults had less than $50,000 in household income (i.e., their income, plus that of a spouse or partner, if applicable). In contrast, only 38% of non-LGBTQ+ adults had household incomes below that amount. This disparity was present at the opposite end of the income range as well: Nearly a third (31%) of non-LGBTQ+ adults were in high-income households (earning $100,000 or more in household income), while just 23% of LGBTQ+ adults were in this group.

Meanwhile, HPS and SHED data indicate that LGBTQ+ adults have less income and job stability than non-LGBTQ+ adults. Twenty-one percent of LGBTQ+ adults experienced a loss of employment income in their household in 2022, while only 14% of non-LGBTQ+ people did. Further, in 2021, LGBTQ+ working adults were more likely to have variable work schedules based on their employer’s needs. Their incomes also varied from month to month more frequently than did non-LGBTQ+ adults’ pay (36% versus 27%). Income and job instability make it difficult to plan ahead and may be two reasons why LGBTQ+ adults are more likely than non-LGBTQ+ to say they changed jobs in the past year.

Households Led by Female Same-Sex Couples Have Lower Median Wealth

The SCF is considered the gold standard of wealth data in the United States. Notwithstanding, the SCF does not measure sexual orientation and codes a binary sex variable: male or female. This results in a lack of information regarding LGBTQ+ households. One imperfect workaround (which we utilize here) is to focus on same-sex couples living in the same household.Though the SCF survey doesn’t ask about sexual orientation, it does ask whether the survey respondent is married or partnered with someone in the household unit and if so, what is the sex of that person. This leaves out the experiences of bisexual, queer and transgender adults in mixed-sex couples and single LGBTQ+ adults. In addition, because of small sample sizes, we grouped survey years for 2013 to 2019.

Our results using this methodology show that households led by female same-sex couples had lower median wealth than those headed by mixed-sex couples. In part, this may be because LGBTQ+ adults are more likely to have lower incomes, as we documented above. Additionally, data show that women have lower median incomes than men. Saving from an income surplus is one way to build wealth (along with investment, capital gains and inheritances). Wealth, or assets minus debts, is a key measure of financial stability, capacity for resiliency, and upward mobility. We found that in the grouped period of 2013 to 2019:Given the limitations of the SCF survey, estimates for the wealth of same-sex couples must be approached very cautiously. The sample size of same-sex couples was very small, even after combining three separate survey years. As a result, the 90% confidence intervals for median wealth were extremely wide: $33,000 to $131,000 for female same-sex couples and $15,000 to $217,000 for male same-sex couples. We excluded male same-sex couples from our analysis because their confidence interval overlapped the confidence interval for mixed-sex couples.

• Female same-sex couples had $82,000 in median household wealth.
• Mixed-sex couples had $185,000 in median household wealth.
• Single men and single women (of any sexual orientation) had $48,000 and $39,000 in median household wealth, respectively.

The median household wealth of female same-sex couples was less than half that of mixed-sex couples.Female same-sex couples had significantly less wealth than mixed-sex couples even after controlling for several other variables, including age, education, race/ethnicity and work status. Further, the wealth of female same-sex couples was only double that of single women. This suggests that no wealth “bonus” is present from partnership or marriage for same-sex female couples. On the other hand, mixed-sex couples’ wealth was greater than the combined household wealth of single women and single men. Untangling the reasons behind these findings will require more research and wider representation of LGBTQ+ groups in data sets.

Bisexual Women and Transgender or Nonbinary Adults Have the Fewest Assets

Looking more closely at the components of wealth reveals that LGBTQ+ adults are more likely to have fewer financial assets (like savings and investments) and are less likely to have nonfinancial assets (like a house) than non-LGBTQ+ adults. This decomposition by sexual orientation and gender identity is the first of its kind, to our knowledge. In terms of financial assets, over half of LGBTQ+ adults (54%) had less than $50,000 in these assets in 2021, while the same was true for only 43% of non-LGBTQ+ adults. Looking at the intersection of gender identity and sexual orientation reveals important differences, as can be seen in the figure below.

Household Savings and Investments

SOURCES: Federal Reserve Board's Survey of Household Economics and Decisionmaking, 2021; and authors’ calculations.

NOTES: Respondents self-reported the total amount of their household’s savings and investments. Categories may not add to 100% due to rounding. The “other” category includes those who selected “a different identity” or “something else.”

Bisexual women and bisexual men were more likely to have household assets and investments below $50,000 than their straight, lesbian or gay counterparts. The distributions of financial assets for gay men and straight men were very similar, and the distributions for lesbian women and straight women were similar as well. Bisexual women and the group of adults identifying as transgender, nonbinary, a different identity, and/or something else had the fewest assets and were the least likely to have savings and investments of $250,000 or more.

Our research shows large gaps in nonfinancial assets as well. Housing is the largest asset for most families, yet per the 2021 SHED, fewer than half of LGBTQ+ adults (44%) were homeowners. In contrast, over two-thirds (68%) of non-LGBTQ+ adults owned their homes. This is likely a primary reason for wealth and asset differences between these two groups. The intersection of gender identity and sexual orientation is quite stark here as well, with 68% of straight men and straight women, 52% of gay men, 51% of lesbian women, 52% of bisexual men, 39% of bisexual women and 36% of adults identifying as transgender, nonbinary, a different identity, and/or something else owning their homes.

LGBTQ+ Adults Have Less Financial Stability

This post gives a broad overview of income and wealth trends for LGBTQ+ and non-LGBTQ+ populations. Along every measure, LGBTQ+ adults and families displayed greater financial fragility. We found that households headed by female same-sex couples had half as much wealth as households headed by mixed-sex couples. Additionally, LGBTQ+ adults had lower incomes, less-stable jobs and greater income volatility, and fewer savings and investments; in addition, they were less likely to be homeowners than non-LGBTQ+ adults. Bisexual women and those who identify as transgender, nonbinary, a different identity, and/or something else had the fewest assets and were roughly half as likely as straight men and straight women to be homeowners. Additional disparities in financial well-being and mental health will be covered in the next On the Economy post in this series.

Notes

1. When using the SCF, we group survey waves 2013, 2016 and 2019 to get a large enough sample. SHED data are from 2021. For HPS, we group waves 41-48 collected in 2022.
2. Though the SCF survey doesn’t ask about sexual orientation, it does ask whether the survey respondent is married or partnered with someone in the household unit and if so, what is the sex of that person.
3. Given the limitations of the SCF survey, estimates for the wealth of same-sex couples must be approached very cautiously. The sample size of same-sex couples was very small, even after combining three separate survey years. As a result, the 90% confidence intervals for median wealth were extremely wide: $33,000 to $131,000 for female same-sex couples and $15,000 to $217,000 for male same-sex couples. We excluded male same-sex couples from our analysis because their confidence interval overlapped the confidence interval for mixed-sex couples.
4. Female same-sex couples had significantly less wealth than mixed-sex couples even after controlling for several other variables, including age, education, race/ethnicity and work status.