Compensated for Life: Sex Work and Disease Risk in Ecuador

Raj Arunachalam, University of Michigan
Manisha Shah, University of Melbourne

As STI prevalence rises, individuals substitute away from risky sex; this behavioral response renders STI epidemics self-limiting. In the commercial sex sector, however, prostitutes draw a compensating differential for engaging in unprotected sex, mitigating their propensity to use condoms. Using evidence from sex workers in Ecuador, we find that the compensating differential for risky sex is increasing in association with local prevalence of STIs. A one percentage point increase in the local STI rate increases the premium for non-condom sex by 17%. Market forces may curb the self-limiting nature of STI epidemics.