Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 996: Human Trafficking and Regulating Prostitution

Samuel Lee and Petra Persson ()
Additional contact information
Samuel Lee: New York University, Postal: Stern School of Business
Petra Persson: Stanford University, Postal: and Research Institute of Industrial Economics (IFN),Stockholm

Abstract: We study sex trafficking in a marriage market model of prostitution. When traffickers can coerce women to sell sex, trafficked prostitutes constitute a non-zero share of supply in any unregulated market for sex. We ask if regulation can eradicate trafficking and restore the equilibrium that would arise in an unregulated market without traffickers. While all existing approaches – criminalization of prostitutes (“the traditional model”), licensed prostitution (“the Dutch model”), and criminalization of johns (“the Swedish model”) – fail to accomplish this goal, we show that there exists an alternative regulatory model that does. Political support for regulation hinges on the level of gender income inequality.

Keywords: Prostitution; Trafficking; Contemporary slavery; Marriage; Illegal goods

JEL-codes: D10; J16; J47; J49; K14; K23

38 pages, December 13, 2013

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