Legalization may be associated with a drop in the price of services, but all the way to free? Surely not.
Joking aside, Canada would do well to look at New Zealand's experience. Prostitution was decriminalized in 2003 and operates as any other industry, subject to normal zoning and health and safety requirements. Results? Nothing spectacular. There are complaints about street prostitution in the same places that there have always been complaints about street prostitution - those workers will include some for whom working in a standard business environment with time sheets and shift requirements would prove difficult. Under-aged prostitutes still make the press occasionally, but there seem to be few of them; brothels employing illegal workers face prosecution. But outcomes for most in the industry seem better.
Concluded the Prostitution Law Review Committee in 2008:
The PRA has been in force for five years. During that time, the sex industry has not increased in size, and many of the social evils predicted by some who opposed the decriminalisation of the sex industry have not been experienced. On the whole, the PRA has been effective in achieving its purpose, and the Committee is confident that the vast majority of people involved in the sex industry are better off under the PRA than they were previously.Most fights now are over zoning; there's some risk that brothels will effectively be recriminalized in some towns through restrictive zoning laws.
Here are the Occupational Health and Safety Guidelines for workers in the sex industry. Decriminalization is hardly a free-for-all.
Update: Note that some of the NZ effects may be due to Police having been fairly light on prostitution enforcement ex ante - brothels were tolerated if they were discreet. If brothels had been subject to greater restriction prior to decriminalization, then a greater fraction of sex workers would have been street workers prior to the law change and would have moved to brothel work after the law change.
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