This study provides new evidence that the inclusion of lesbian, gay, bisexual, and transgender (LGBT) people is linked to economic performance. A large and growing body of research documents the violence, discrimination, and social stigma experienced by LGBT people in every country that has been studied. These experiences at the individual level limit LGBT people’s access to jobs, to schooling, to health care services, to political participation, and to participation in their families, for example. All of those effects create barriers to full participation in the economy for LGBT people, which could also reduce economic output more generally.

We test the link between LGBT inclusion and Gross Domestic Product (GDP) per capita at the macroeconomic level. We predict that countries with more inclusion will have higher GDP per capita. To assess this prediction, we study more than 120 countries between 1990 and 2014.

To measure inclusion, we draw on three new measures: (1) a Legal Count Index (LCI) that counts the number of LGBT-supportive laws, (2) a Legal Environment Index (LEI) that measures patterns of adoption of laws in countries, and (3) a Global Acceptance Index (GAI) that is estimated from public opinion data. We combine these measures with economic data from the Penn World Tables and run regressions that control for country-level fixed effects and year effects.