Does Legalized Prostitution Increase Human Trafficking?
University of Marburg - School of Business & Economics
University of Heidelberg
London School of Economics and Political Science (LSE)
January 16, 2012
World Development, 41 (1), 2013, pp. 67-82
This paper investigates the impact of legalized prostitution on human trafficking inflows. According to economic theory, there are two opposing effects of unknown magnitude. The scale effect of legalized prostitution leads to an expansion of the prostitution market, increasing human trafficking, while the substitution effect reduces demand for trafficked women as legal prostitutes are favored over trafficked ones. Our empirical analysis for a cross-section of up to 150 countries shows that the scale effect dominates the substitution effect. On average, countries where prostitution is legal experience larger reported human trafficking inflows.
Number of Pages in PDF File: 48
Keywords: human trafficking, prostitution, human rights, globalization
JEL Classification: O15, F22, K42
Date posted: January 16, 2012 ; Last revised: December 10, 2012