Does prostitution in Thailand make up around 10% of its GDP?

Question

There are several sources that make a claim like that, I'm giving some of them:

• We don’t do sex work because we are poor, we do sex work to end our poverty

  Key sentence in that link:

  We are also the backbone of the tourism industry, which makes up around 10% of Thailand’s annual GDP.

• Sex toys popular in Thailand despite conservative laws

  Key sentence in that link:

  The sex industry is thought to comprise up to 10% of Thailand’s gross domestic product.

• Sun, sea, sand... and a £5bn sex trade: Seedy side of Brit crooks' Thai haven where he fled to escape drugs charges before prostitute death quiz

  Key sentence in that link:

  It is a lucrative business, generating around £4.5billion a year – 10% of Thailand’s GDP.

I'm aware that Thailand is well known as a sex tourism country, but, even so, I find that for prostitution to make up 10% of its GDP it would be an extremely humongous phenomenon there.

Answer 1

This difficult to estimate even in developed countries. Best I could find for East Asia, in general, is this from the ILO, from 1998 (duh!):

The sex sector in the four countries [Indonesia, Malaysia, Philippines and Thailand] is estimated to account for anywhere from 2 to 14 per cent of Gross Domestic Product (GDP), and the revenues it generates are crucial to the livelihoods and earnings potential of millions of workers beyond the prostitutes themselves.

[...] In Thailand, for example, close to US$300 million is transferred annually to rural families by women working in the sex sector in urban areas, a sum that in many cases exceeds the budgets of government-funded development programmes. For the 1993-95 period, the estimate was that prostitution yielded an annual income of between US$22.5 and 27 billion.

The GDP of Thailand was about $200 billion back then (in 2015 dollars), so 10% doesn't seem outlandish. In fact it was probably more, percentage wise, in 1995 dollars.

Another press article, also from 1999 says

A study by a Thai university estimated the sex sector at around $25 billion, or 12% of the country's gross domestic product.

There are no other [relevant] details, but I suspect it's referring to the same dataset.

Wikipedia says

In 2015 Havocscope said that about US$6.4 billion in annual revenue was being generated by the trade, a figure which accounted for 10 percent of Thailand's GDP. Havocscope says that sex workers in Thailand send an annual average of US$300 million to family members who reside in more rural areas of Thailand.

So I suspect that's where the newer claims come from. The original article cited by Wikipedia doesn't load for me. And given that it's dropping the same US$300 figure as the much older ones, I suspect the actual data is the same, and probably just extrapolated i.e. carried forward.

Answer 2

No.

False, absurd, and utterly impossible.

Assume each sex worker has the same contribution to GDP as the average labor force participant.

Then for prostitution to account for 10% of GDP, 10% of the labor force must be sex workers. (Even a tourist who spends most of his time in the shadiest parts of Bangkok would find this absurd.)

In 2023, Thailand had a population of 66.05M and a labor force of 40.39M. So, 10% of the labor force would mean 4M Thais are sex workers.

But in fact, Thailand has only 106,600 sex workers (2023, UNAIDS).

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One way for the math to work out and for prostitution to account for 10% of GDP would be this:

• AIDSinfo's estimate is off by 10x, so that there are in fact about 1M sex workers.
• Each sex worker is about 4x as productive as the average Thai worker.

Note that average GDP (PPP) contributed by each worker is about $25,210 (Thai GDP per capita, see below) × 40.39 ÷ 66.05 ≈ $41,000.

So if each sex worker were about 4x as productive as the average Thai worker, then each sex worker contributes about 4 × $41,000 = $164,000 to GDP (PPP). Not impossible for a select few high-end escorts, for utterly implausible for the average sex worker (which includes sex workers that cater to locals, sex workers in impoverished towns that tourists never visit).

From one 2019 study:

sex workers can potentially earn a minimum total monthly income of THB 15,000 (approx. USD 450). Some sex workers can earn significantly more, up to THB 60,000 (approx. USD 1,800) ...

According to the public health officials interviewed for this study, migrant sex workers in the lower end establishments along the Thai–Lao border can earn as much as THB 50,000–60,000 per month [≈US$1500–1800] if they have sex with up to ten clients per day.

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Note the following:

• Thailand's GDP per capita (PPP) is $25,210 (IMF)—a figure the US achieved only in 1992.

Thailand is today not the backward and "depraved" country good only for GI Joe "R&R" that may still be etched in the mind of Westerners from the 1960s and 1970s (and movies and TV shows produced for decades after).

• In 2019, tourism's contribution to Thailand GDP was only 11.5% in 2019 (pre-Covid, S&P Global) with 39.8M international arrivals.

Is it plausible that the prostitution sector constituted nearly as great a proportion of GDP as the tourism sector in a country that is one of the world's most heavily reliant on tourism?

• Despite being only a medium-sized country of about 66M, Thailand is today the world's 10th largest car producer.

Its car industry also accounts for about 10% of GDP.

Again, is it plausible that the prostitution sector constituted nearly as great a proportion of GDP as the world's 10th-largest car producer?