Prostitution is often illegal; perhaps as Luke Somers suggests this is encouraged by sweatshop owners trying to eliminate competition for workers. There is also a history in many places of using "rescued" prostitutes as essentially slave labor, as in the notorious Magdalene laundries in Ireland.
Actually, prostitution is rarely illegal, especially in the past. In particular, it is legal today in Bangladesh and has always been legal in Ireland. Though child prostitution is not legal in either place today.
I've been looking for reliable evidence of a claim I've heard a few times. The claim is that the closing of sweatshops (by anti-globalization activists) has resulted in many of the child workers becoming prostitutes. The idea is frequently proffered as an example of do-gooder foolishness ignoring basic economics and screwing people over.
However, despite searching for a while, I can't find anything to indicate that this actually happened.
Some guy at the Library of Economics and Liberty mentions it here:
But in the article, Paul Krugman mentions the Oxfam study without citation:
I looked at some Oxfam stuff, but couldn't find the study.
A similar claim is made in The Race to the Top: The Real Story of Globalization by Tomas Larsson (go here and use the search tool for the word 'prostitution'), but doesn't mention the Oxfam study:
I looked for a paper or something by Maskus but came up empty.
I was taught this fact at a Poli Sci class in college, but I'm starting to think it's more likely to be an information cascade. Can anyone do a better job than me?
Thanks in advance.