Criminalising prostitutes, or their clients?

One of the examples that I have used for many years in illustrating supply and demand is the different impacts of enforcing penalties on the sellers, vs. the buyers, of illegal drugs. Last month, The Economist had an article (maybe paywalled for you) on a similar point, related to the market for sex services:

In 1999 Sweden banned the purchase—but not the sale—of sex. A curious coalition of feminists and Christians backed the law. They argued that it would wipe out prostitution by eliminating demand, and that this would be a good thing because all sex work is exploitative...

Over the past two decades the Swedish model has been taken up by nearby Norway and Iceland, and beyond, by Canada, France, Ireland, Israel and Northern Ireland. In 2014 the European Parliament urged EU members to adopt it. Spanish lawmakers are in the process of doing so. In America politicians in Maine and Massachusetts are calling for a similar approach.

In areas where prostitution is illegal, the supply of sex services is lower than in areas where it is legal. That is because the sellers in this market face higher costs, such as the costs of fines or other penalties for engaging in an illegal activity. This is shown in the diagram below, where the supply curve is lower in the market where prostitution is illegal (S1, compared with S0). The price of sex services will be higher in the market where prostitution is illegal (P1, compared with P0), and the quantity of sex services traded will be lower (Q1, compared with Q0).

If instead the purchase, but not the sale, of sex services is illegal, then the penalties are imposed on the buyers of sex services. This reduces the demand, because the net benefit of sex services to the buyer is lower (because of the risk of fines or other penalties). This is shown in the diagram below, where the demand curve is lower (DB, compared with DA). The price of sex services will be lower in the market where buying sex services is illegal (PB, compared with PA), and the quantity of sex services traded will be lower (QB, compared with QA).

Notice that the key difference in these two markets is what happens to the price. The price is higher when selling sex is illegal, while the price is lower when buying sex is illegal (if both of these activities are illegal, then the overall effect on price will be ambiguous).

If your goal is to "wipe out prostitution" (as per The Economist article), which of these approaches is better depends on what you think happens next. If the price is higher, then the potential income from sex services is higher, so that might encourage more sellers to enter the market. That would simply shift the supply curve back towards where it started, meaning that the policy of penalising sellers has little overall impact. That suggests that penalising buyers may be a better approach to eliminating sex services. However, as The Economist article notes, that doesn't mean it is all good news:

Supporters of the Swedish model claim it protects prostitutes by giving them some power over clients, who will be worried about being shopped to the police. Prostitutes say it has the opposite effect. Face-to-face negotiations are more hurried. Kate McGrew of Sex Workers Alliance Ireland says that fewer sex workers are heeding what used to be red flags. For example, a trans woman was beaten up after taking on a client who asked if she was alone. Clients are more likely to insist on assignations in remote places. And because men refuse to reveal identifying information, prostitutes have little recourse if they are attacked.

In a study of more than 500 sex workers in France, nearly 40% said their power to negotiate prices and insist on condoms had diminished since buying sex was banned in 2016. Nearly 80% said their earnings had fallen, and almost 90% did not support the law. In Ireland violence against prostitutes shot up by almost 80% in the year after buying sex was banned, according to Ugly Mugs, a group that encourages sex workers to report attacks.

Yet the number of sex workers in Ireland who tell the police about such crimes has fallen. France has seen similar shifts.

If buyers are being penalised, then they become more cautious. They want to meet in more secluded locations, where the sellers of sex services are more isolated and unable to easily summon help if something goes wrong. This increases the risk of harm to the sellers. Penalising the buyers also reduces the price, which makes the sellers of sex services more willing to take risks (to their safety, but also to their health) to maintain their income.

Perhaps the best approach is actually to decriminalise (or legalise) both sides of the market:

Advocates of a more liberal approach point to New Zealand, which treats selling sex like any other job. An official report says that “the vast majority” of sex workers are safer and healthier since prostitution was decriminalised in 2003. Those working on the streets report that their relationship with the police has improved. Likewise, in the Australian state of New South Wales, where selling sex is legal, prostitutes’ use of condoms is higher than in other Australian states where it is banned.

If the market isn't 'hidden', then sellers of sex services can more easily be targeted for public health, they can have better relationships with the police. Buyers and sellers are safer as a result. And police resources can be diverted from policing the sex services market to other tasks. This seems like an easy win-win for all parties, and indeed has proven to be the case in New Zealand. The main argument for penalties on the buyers (or sellers) in this market is ideological.