Why Does Sex Pay?

Andrew Leigh ponders the economics of sex workers:

Economists have proposed two theories for why prostitutes (at least, those not working the street) earn such high wages. Clearly, part of the answer is that these earnings are a form of ‘hazard pay’, akin to that received by coal miners, window cleaners and motorcycle couriers. Another more controversial explanation is that prostitutes’ high pay is effectively a form of compensation for the fact that current or former prostitutes have more difficulty finding a marriage partner. Intriguing as it is, the marriage hypothesis is not yet compelling, since the evidence shows that many women combine prostitution and marriage.