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LGBT Inclusion and Economic Development

LGBT Inclusion and Economic Development

Our #WednesdayswithMDBInsight post this week looks at inclusion and diversity in economic development and features thoughts from Jose Rodriguez, Research Analyst. Much has been said about the impact of diversity on the economic development and economic growth of nations. However, most of the research around this topic gravitates around areas such as immigration and cultural diversity. Diversity, however, goes far beyond the solely cultural background of an individual. The inclusion of historically marginalized groups, including members of the LGBTQ2S+ community, has become more relevant in economic development conversations.

Although the literature on the topic is still scarce, a couple of research documents developed by The Williams Institute at the University of California in Los Angeles have found a positive correlation between the Gross Domestic Product (GDP) per capita and the inclusion of “the LGBT population”. This research describes the macroeconomic impact of inclusion in the broader economy, and it is directly linked to the development of “human capital.”  In this order of ideas, the authors showcase three examples of common “LGBT exclusion” in the economy:

  • Employment discrimination: This means LGBT individuals are not being used to their full capacity in the economy. This translates into less efficiency, stopping this group from making the economic contributions they can achieve;
  • Barriers to education: LGBT students face more challenges to stay in school, this as a result of harassment and discrimination;
  • Health challenges: LGBT individuals also face significant challenges (violence, stigma, physical and emotional distress) that reduce their ability to make economic contributions.

Moreover, LGBT inclusion is seen as “Strategic Modernization” and the literature suggests that countries might use the fact of being more inclusive of LGBT citizens to demonstrate a modern image to enhance attractiveness to tourists and investors. In addition, the improvement of legal rights and positive  public opinion creates the perfect environment to support “creative people.” Therefore, places that have more friendly policies towards LGBT people are also more likely to appeal to non-LGBT immigrants and skilled workers as these locations espouse tolerance and diversity.

As communities seek to attract and retain workers, different approaches should be taken in order to warranty the success of potential initiatives. As immigration comes often to the table, places must be able to adapt to be more inclusive, broaden the candidate pool, and become more attractive to newcomers.


1 Badget, Park and Flores (2018). Links Between Economic Development and New Measures of LGBT Inclusion. The Williams Institute. UCLA School of Law

2Badget, Park and Flores (2019). The relationship between LGBT inclusion and economic development: Macro-level evidence. World Development.   World Development · August 2019

 3 Florida, R (2014). The Global Map of Homophobia. The Atlantic Cities.  

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Jose 2018Our Wednesdays with MDB Insight posts feature the thinkers and doers on our team sharing ideas and talking about what’s important to us as professionals. We have very diverse backgrounds and a range of interests to share with you. We hope you’re enjoying these posts and that you will join the conversation with us and let us know what’s on your mind mid-week.

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