Prostitution or Marriage? Evidence from the Nordic Model

Abstract

We identify the substitution effect of the prostitution market on the marriage market. Our tests exploit the staggered country-level adoption of the Nordic model of prostitution regulation, which is the recent global trend of restraining commercial sex. We find that the Nordic model leads to a significant increase in marriage rates and a significant decrease in divorce rates. These results are mainly driven by marriages among young people and marriages among previously single people (compared to those who were previously in legal unions). We further show that the substitution effect of prostitution on marriage is stronger when female’s socioeconomic status is weaker and when people prefer marriage over cohabitation. Overall, our study provides the first empirical evidence that prostitution is a sexual substitute for marriage.

Keywords: Prostitution, Commercial Sex, Marriage, Divorce, Nordic model

JEL Classification: J12, J47, J48, K23, K42