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An Economic Theory of Sexual Exchanges and Human Capital

Author

Listed:
  • Carroni, Elias

    (University of Bologna)

  • Della Giusta, Marina

    (University of Turin)

  • Dragone, Davide

    (University of Bologna)

Abstract

We develop a rational choice model of sexual exchange that unifies marriage and paid sex, explaining two key facts: the gendered segregation of sex markets and the decline in sexual activity and fertility. Individuals choose whether to engage in paid or unpaid sex based on income, human capital, and social norms. Gendered patterns emerge endogenously from the asymmetric distributions of these traits. The model also shows how the rise of digital sex reduces the cost of supplying sex, increases market participation, and reallocates time away from unpaid intimacy—leading to lower fertility even without biological constraints.

Suggested Citation

  • Carroni, Elias & Della Giusta, Marina & Dragone, Davide, 2025. "An Economic Theory of Sexual Exchanges and Human Capital," IZA Discussion Papers 18002, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18002
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    Keywords

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    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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