The illegal market for sex in the United States: Insights from economic research

The illegal market for sex in the United States generates significant economic activity yet remains understudied due to its illegality and clandestine nature. This paper synthesizes existing empirical evidence documenting aspects of market structure, impacts of regulation, and notable changes over time. Criminalization, while intended to suppress the market, often exacerbates harms by displacing activity underground, increasing violence against sex workers, and elevating disease transmission risks. Natural experiments, including decriminalization episodes in Rhode Island and policy shifts in Europe, reveal that decriminalization can reduce sexually transmitted infections and violence against women. Additionally, technological shifts-particularly the rise of online platforms due to the internet-have reshaped market organization. These findings challenge conventional legal and moral frameworks and underscore the need for evidence-based policymaking to guide effective regulation of sex markets.