The Relationship between Prostitution Laws and Sex Trafficking: Theory and Evidence on Scale, Substitution, and Replacement Effects
68 Pages Posted: 11 Jul 2015 Last revised: 7 Aug 2018
Date Written: March 27, 2016
Sex trafficking is a pervasive problem in many parts of the world. This study investigates the relationship between different types of prostitution laws and the prevalence of sex and human trafficking across European countries using data that covers 2008-2010. The Article attempts to make three contributions to the literature. First, it builds on existing theories of the link between the demand for purchased sex and the supply of sex trafficking to create a simple ordinal measure of prostitution laws that better reflects the actual cross-country variation in prostitution laws compared with a binary variable that merely indicates whether prostitution is legal or illegal. The measure is called the Prostitution Law Index and is based on a very rudimentary framework that analyzes forms of scale, substitution, and replacement effects in the market for prostitution. Scale refers to increases in the prevalence of trafficking that are caused by growth in the overall size of the market for prostitution. Substitution refers to when current consumers begin to purchase sex with individuals who voluntarily sell sex rather than with trafficking victims. Replacement refers to when new voluntary sellers of sex enter the market and crowd out trafficking victims. The index ranks prostitution laws across countries on a four-point scale (from 1 to 4) based on expected effectiveness (from least to most effective) in terms of reducing the prevalence of sex trafficking. Second, the study uses a new dataset provided by the European Union to study the relationship between Prostitution Law Index scores and prevalence of sex trafficking. Cross-country analyses suggest that there generally appears to be a negative relationship between a country’s Prostitution Law Index score and the prevalence of trafficking. Greater legislative efforts to reduce scale and to increase substitution and replacement — as captured by a higher score in the index — appear to, on average, be associated with lower levels of sex trafficking. Third, the Article presents a basic Difference-in-Differences analysis — with very limited data and thus with many caveats — that seeks to study the causal impact of Norway’s implementation in 2009 of a set of prostitution laws that made it legal to sell sex, but illegal to buy sex (the category of laws that receives the highest index score). Tentative results suggest that this legal reform may potentially have caused some reduction in the prevalence of trafficking.
Keywords: human trafficking, sex trafficking, human rights, substitution effect, scale effect, replacement effect, comparative law
JEL Classification: D11, D12, D21, D4, J16, K42
Suggested Citation: Suggested Citation