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The Wages of Sin

Columbia University Economics Discussion Paper No. 0809-16

29 Pages Posted: 11 Jun 2009  

Lena Edlund

Columbia University - Graduate School of Arts and Sciences, Department of Economics

Joseph Engelberg

University of California, San Diego (UCSD) - Rady School of Management

Christopher A. Parsons

University of California, San Diego (UCSD) - Rady School of Management

Date Written: June 4, 2009

Abstract

Edlund and Korn [2002] (EK) proposed that prostitutes are well paid and that the wage premium reflects foregone marriage market opportunities. However, studies of street prostitution in the U.S. have revealed only modest wages and considerable risks of disease and violence, casting doubt on EK’s premise of an unexplained wage premium. In this paper, we present evidence from high-end prostitution, the so called escort market, a market that is, if not entirely safe, notably safer than street prostitution. Analyzing wage information on more than 40,000 escorts in the U.S. and Canada collected from a web site, we find strong support for EK. First, escorts in the sample earn high wages, on average $280/hour. Second, while looks decline monotonically with age, wages follow a hump-shaped pattern, with a peak in the 26-30 age bracket, which coincides with the most intensive marriage ages for women in the U.S. Third, the age-wage profile is significantly flatter, and prices are lower (5%), despite slightly better escort characteristics, in cities that rank high in terms of conferences, suggesting that servicing men in transit is associated with less stigma. Fourth, this hump in the age-wage profile is absent among escorts for whom the marriage market penalty is lower or absent: escorts who do not provide sex and transsexuals.

JEL Classification: J12, J31, J49

Suggested Citation

Edlund, Lena and Engelberg, Joseph and Parsons, Christopher A., The Wages of Sin (June 4, 2009). Columbia University Economics Discussion Paper No. 0809-16. Available at SSRN: https://ssrn.com/abstract=1413899 or http://dx.doi.org/10.2139/ssrn.1413899

Lena Edlund (Contact Author)

Columbia University - Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States
212-854-5489 (Phone)
212-854-8059 (Fax)

Joseph Engelberg

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

Christopher Parsons

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

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