Fallen women: Recessions and the supply of sex work

This paper studies how recessions impact the supply of sex work. I consider a historical recession that affected British cotton textile production, an industry that employed a significant number of women and was geographically localized. To measure the size of the market for sex, I digitized new data on the locations of establishments where sex work occurred across Britain. The recession led to 12 more establishments per 100,000 people in exposed counties, an increase of approximately 20 %. Informal establishments, such as pubs, accounted for three-fourths of the increase while brothels accounted for approximately 25 %. I provide suggestive evidence that an outward shift in supply contributed to the increase. • A historical recession in Britain increased the number of sex work establishments. • The recession led to a 20 % increase in establishments in treated areas. • Three-fourths of the increase was in “informal” establishments, such as pubs. • The remaining quarter of the increase was in formal brothels. • Suggestive evidence illustrates the increase was due to an outward shift in supply.