Saturday, December 11, 2010

Compensating risk differentials for prostitution are small

Past research has found that prostitutes earn about twice the weekly wage of a typical non-manual female worker and three times that of manual workers. One reason for this wage premium is the opportunity cost of foregoing marriage, though working in a foreign country reduces this cost. New research finds that Chicago street prostitutes earn roughly four times their hourly wage in other activities, but this higher wage represents relatively meager compensation for the significant risk they bear. One reason for the low compensation despite the high risk is the relatively elastic supply.

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