Research Highlights Featured Chart

March 19, 2026

The gender and income spectrum

Nonbinary and transgender workers face substantial earnings penalties relative to cisgender men.

Tyler Smith

Source: QueerUpTheHistory, CC BY-SA 4.0

Recognition of nonbinary and transgender identities by high-income nations is a relatively recent development. Only in the past few decades have economists begun to examine how such identities shape individuals' economic lives.

In a paper in the American Economic Review: Insights, authors Christopher S. Carpenter, Donn Feir, Krishna Pendakur, and Casey Warman provide the first nationally representative evidence on the earnings of nonbinary and transgender people in North America. The authors document that these minority groups face substantial earnings penalties relative to cisgender men, especially among the lowest earners.

Drawing on data from the 2021 Canadian Census—the first to distinguish gender identity from sex assigned at birth—the authors identified roughly 6,400 nonbinary and 7,600 transgender individuals aged 25 to 59 and linked those records to administrative tax data.

Figure 1 from the authors’ paper shows earnings disparities relative to cisgender men for gender minority groups and cisgender women across income levels.

Figure 1 from Carpenter et al. (2026)

The chart plots earnings differences—expressed as percent gaps relative to cisgender men after controlling for age, education, and other demographic characteristics—at each income decile of the 2019 earnings distribution. Five groups are represented: transgender men (red triangles), nonbinary persons assigned male at birth (green squares), transgender women (blue triangles), cisgender women (yellow diamonds), and nonbinary persons assigned female at birth (purple circles). The shading represents 95 percent confidence intervals.

All five lines sit below zero, showing that each group earns less than comparable cisgender men at every point in the income distribution. All five lines slope upward from left to right, meaning the earnings gap narrows toward the top of the distribution. 

Nonbinary people assigned female at birth occupy the lowest position on the figure at every decile, going from roughly negative 60 percent at the 10th percentile to negative 40 percent at the 90th percentile. Nonbinary people assigned male at birth show an even steeper gradient, from negative 53 percent at the bottom to negative 19 percent at the top of the income distribution. Transgender women and transgender men fare slightly better, but exhibit similar patterns.

The findings suggest that earnings disadvantages among gender minority workers are not uniform; it varies across identities and is more significant when economic vulnerability is already greatest.