Market Design: From repugnant, to legal, to mandatory?

The Telegraph reports on the intersection of prostitution law (it's now legal) and unemployment law (you can lose your benefits if you turn down a job) in Germany:?'If you don't take a job as a prostitute, we can stop your benefits'

"A 25-year-old waitress who turned down a job providing "sexual services'' at a brothel in Berlin faces possible cuts to her unemployment benefit under laws introduced this year.

"Prostitution was legalised in Germany just over two years ago and brothel owners ? who must pay tax and employee health insurance ? were granted access to official databases of jobseekers.

?"The waitress, an unemployed information technology professional, had said that she was willing to work in a bar at night and had worked in a cafe.

?"She received a letter from the job centre telling her that an employer was interested in her "profile'' and that she should ring them. Only on doing so did the woman, who has not been identified for legal reasons, realise that she was calling a brothel.

?"Under Germany's welfare reforms, any woman under 55 who has been out of work for more than a year can be forced to take an available job ? including in the sex industry ? or lose her unemployment benefit. Last month German unemployment rose for the 11th consecutive month to 4.5 million, taking the number out of work to its highest since reunification in 1990.

?"The government had considered making brothels an exception on moral grounds, but decided that it would be too difficult to distinguish them from bars. As a result, job centres must treat employers looking for a prostitute in the same way as those looking for a dental nurse."
...
"Tatiana Ulyanova, who owns a brothel in central Berlin, has been searching the online database of her local job centre for recruits.

"Why shouldn't I look for employees through the job centre when I pay my taxes just like anybody else?" said Miss Ulyanova."
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So we have here a situation in which a formerly repugnant transaction became legal and might, under some circumstances become mandatory (at least for those seeking unemployment benefits). This reminds me of one of the better arguments against legalizing kidney sales and other payments to organ donors: once they were legal, some future Congress might want to make unemployment benefits available only to people who had already utilized their kidney resources, for example? See my posts on the fraught debate about?compensation for donors.

HT: Itay Fainmesser

Source: http://marketdesigner.blogspot.com/2012/02/from-repugnant-to-legal-to-mandatory.html

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