Does Legalized Prostitution Increase Human Trafficking?

World Development, 41 (1), 2013, pp. 67-82

48 Pages Posted: 16 Jan 2012 Last revised: 10 Dec 2012

Seo-Young Cho

University of Marburg - School of Business & Economics

Axel Dreher

University of Heidelberg

Eric Neumayer

London School of Economics and Political Science (LSE)

Date Written: January 16, 2012

Abstract

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.

Keywords: human trafficking, prostitution, human rights, globalization

JEL Classification: O15, F22, K42

Suggested Citation

Cho, Seo-Young and Dreher, Axel and Neumayer, Eric, Does Legalized Prostitution Increase Human Trafficking? (January 16, 2012). World Development, 41 (1), 2013, pp. 67-82. Available at SSRN: https://ssrn.com/abstract=1986065 or http://dx.doi.org/10.2139/ssrn.1986065

Seo-Young Cho (Contact Author)

University of Marburg - School of Business & Economics ( email )

Barfuessertor 2
Marburg, Hessen 35037
Germany

HOME PAGE: http://www.economics-human-trafficking.org/

Axel Dreher

University of Heidelberg ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Eric Neumayer

London School of Economics and Political Science (LSE) ( email )

Houghton Street
WC2A 2AE London
United Kingdom
+44 207 955 7598 (Phone)
+44 207 955 7412 (Fax)

HOME PAGE: http://personal.lse.ac.uk/neumayer

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