The Economic Cost of Homophobia

“As an economist, I see life expectancy as life where you can earn money.”

-Erik Lamontagne 

(Researcher, United Nations Programme on HIV and AIDS)


A year ago, Buzzfeed India released a video about the economic cost of homophobia in India. As someone who speaks up about issues surrounding the community, the video titled Homophobia is Costing India Billions of Dollars probed me to look further.

When one refers to the cost of homophobia, this cost could be monetary (being economic), or the physical and mental health of the person on the receiving end. While the cost of the former can be quantified, the latter could stem from one having to be at the receiving end of harassment due to homophobia. This could, in turn, result in them being unable to perform to their full potential.

According to the United Nations, in the US alone, 40% of homeless youth identify as queer. The rates of joblessness, poverty, food insecurity, and depression are higher among queer people. A drag on growth means fewer tax receipts paid to the government for education, health benefits, and other essential services. A study looked at 39 countries and found a link between the marginalization of the queer community and the corresponding loss of potential economic output. Let’s now step a little closer to home as this could cost an economy the size of India upto $32 billion a year. The UN calls it a human rights priority and a development comparative; it being homophobia and transphobia.

A 2014 World Bank report found 3.8% of the Indian workforce to be a part of the queer community. This is 3.8% of a huge dependent population that is discriminated against at the workplace. One should also keep in mind that this number could be much higher considering the narrow scope of the sample and the unwillingness of individuals to identify as queer on paper. There are two possible reasons for this, the first being difficulties in the future with respect to societal stigma, and the second being the prospect of identifying on paper hindering future job opportunities. In 2014, the World Bank conducted a survey on the economic cost of homophobia and the exclusion of queer people in India. The survey found that the Indian economy is suffering a loss of 0.1% to 1.7% of its GDP – which is around 7.7 billion USD (₹50,000 crores) – based on the following parameters:

  •         56% of white-collar queer workers reported discrimination at the workplace.
  •         64% of feminine gay men have a monthly income lower than $70 (₹5,000).
  •         66% of men who have sex with men reported a daily wage of $1.5 (₹100).
  •         28% of queer people have experienced familial violence.


Consider how 64% of feminine gay men have a monthly income lower than $70 (₹5,000). As someone who is entering the job market in less than a year, being asked to live on only ₹5,000 a month seems an impossible feat. Imagine your monthly income being only one trip to H&M, or a 6 month Netflix subscription. While these would be a luxury in itself, it gets more realistic when I realize that even weekly rent on a 1BHK apartment in the suburbs of Mumbai is much higher than ₹5,000. Trying to live – and live decently even – on an income like that is not an easy task.

The same World Bank report talks about 3 factors that deter a queer person who is a part of the workforce from performing to their full potential: discrimination, bullying, and mental and physical health. Homophobia in the workplace could result in one not feeling comfortable enough to come out as queer; or being unable to take up, or denied, or not even offered a certain job because of who they identify as. Additionally, if one’s colleagues are aware of their sexuality, it could result in them either being constantly penalized for it, or even in them losing their job because of it.

“Change is a trickle-down effect, and this particular change starts at the top with the political sphere.”

As of the 6th of September, 2019 it has been a year since the amendment of the Indian Penal Code’s Article 377. However, not much has changed since then. Earlier this week itself, a queer party organized at Taj Lands End in Mumbai was canceled when the manager was uncomfortable with the attire of certain guests. This further goes to show how without the proper implementation of laws in the political sphere, proper execution in the economic and social spheres is not possible.

While IPC’s 377 from 2018 and the Transgender Persons (Protection of Rights) Bill, 2019 require a whole revamp in the form of amendments, the very fact that they were addressed and then passed after multiple attempts indicates a step in the right direction. While the government is starting to make progress, what is the next step with respect to inclusivity in the workforce? The solution starts with governments introducing more inclusive policies, and effective public education and training. Change is a trickle-down effect, and this particular change starts at the top with the political sphere. It then gradually trickles down to the social and economic spheres. A change in laws helps bring about a change in the mindset of the people.

Additionally, a chain reaction takes place, where, without a change in laws, companies have no inclination to make the workspace queer-friendly unless they are one of 3: a queer company, indulge in rainbow capitalism, or include queer individuals as a part of diversity hiring. There exist only a handful of Indian companies that are truly queer-friendly in the absence of a queer individual in a crucial role. Simply saying your company is queer-friendly but not enforcing it does not make it a queer-friendly space.

LGBT+ rights go hand-in-hand with economic development and thus governments that insist on maintaining the criminalisation of homosexuality will continue to put their countries at a considerable economic disadvantage.

-Peter Tatchell Foundation

The absence of a safe space to queer individuals brings us back to the 3 factors mentioned in the World Bank report that affect the mental health and stability of an individual on the receiving end. With companies not promoting safe spaces, a hostile environment is created. Being unable to work in a hostile environment, like any other human being, the individual will be unable to perform to their full potential. This decreases output at the micro-level, which goes on to affect the economy at a macro level.


In addition to government policies, companies itself need to introduce new corporate policies that make workspaces safer and more inclusive for queer individuals. Companies like Boston Consulting Group (BCG) and EY pride themselves in being queer-friendly workspaces. BCG is in the Stonewall’s Top 100 queer-friendly places to work at. Additionally, EY’s #ProudToBelong campaign promotes the fact that differences matter and building an inclusive workplace where everyone feels they belong isn’t just the right thing to do, it is a business imperative.

A paper in 2018 by Godrej India Culture Lab titled A Manifesto for Trans Inclusion in the Indian Workspace by Nayanika Nambiar with Parmesh Shahani states that innovation and talent are found in inclusive workspaces. Considering the fact that in 2014, India was losing an upwards of ₹50,000 crores due to queer-exclusion in the workspace, this does seem likely. Inclusive workspaces foster a healthy – safe – working environment. This safe space allows queer individuals to perform to their full potential, giving them the previously absent opportunity to excel. A work environment that is not inclusive deprives individuals of that opportunity itself, be it in the form of ideas and innovation, or even getting that job in the first place. And with closeted queer people not feeling comfortable enough to come out in the first place in this unhealthy environment, where does this leave out and proud queer people in the workspace?

“Inclusion and diversity are, in fact, correlated with greater perceived innovation.”

Additionally, the very same paper states an incentive for companies to become queer-friendly, which makes it a win-win on both sides. It goes into detail about how queer inclusion can increase the revenue of a company. According to a 2014 Firstpost article, when the same is applied to India, a margin under $200 billion (6% of GDP) can be assumed to be income earned from India’s estimated 45 million queer individuals.

This goes to show how inclusivity in the workforce not only benefits the community but also the company that partakes in it. Inclusivity has been known to result in a healthy working environment, which in turn fosters development and innovation. The future is inclusive and intersectional. It is time we work towards it.

-Anisha Noronha (Editor-in-Chief, Declassified)


References and Further Reading:


Buzzfeed: Homophobia is Costing India Billions of Dollars:

UN: The Cost of Exclusion:

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