By Manisha Shah

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.

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.

By Joras Ferwerda

Criminals launder their proceeds from crime, either themselves or by paying a professional, to disguise the link between the criminal, the crime, and the proceeds. This allows the criminal to spend the proceeds more freely and lowers the chance of receiving unwanted attention from the authorities. This paper investigates the structure and dynamics of the understudied market for money laundering services. The analysis reveals that this illegal market is demand-driven and fragmented, with different forms of laundering, each requiring different steps with varying levels of risk. High search costs, specialized money launderers, and uncertainties lead to local monopolies. Demand tends to be relatively inelastic because criminals eventually need laundering services to spend their proceeds. Local monopolies, inelastic demand, and poor information flows
lead to relatively high prices for laundering. Trust issues and two-sided asymmetric information lead to a market with relationships that tend to last longer than generally expected in illegal markets.