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Does Legalized Prostitution Increase Human Trafficking?

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  • Seo-Young Cho
  • Axel Dreher
  • Eric Neumayer

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.

Suggested Citation

  • Seo-Young Cho & Axel Dreher & Eric Neumayer, 2012. "Does Legalized Prostitution Increase Human Trafficking?," Economics of Security Working Paper Series 71, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diweos:diweos71
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    More about this item

    Keywords

    human trafficking; prostitution; legalization; scale effect; substitution effect; global;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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