Abstract
Fertility in the human population is declining, and although sexual mores have become more liberal, sexual activity has been steadily declining too. Economics lacks a general model of sexual exchange, a key human need that affects physical and mental health, the formation and dissolution of relationships and families, and fertility patterns. We propose a model in which individuals devote time to pursuing sexual exchanges, trading sex both for other sex and for monetary and non-monetary compensations, which can happen within and outside stable relationships. The productivity of individuals in obtaining sex across different markets depends on their endowments of human capital and relational skills. This endowment, the market price for sex, and wages from non-sex-related jobs jointly determine the allocation of a person's time in obtaining sex in spot or repeated relationships (including marriage) and buying or selling sex in the paid sex market, as well as the total amount of sex exchanged in society. Gender norms affect the distribution of human capital and relational skills, their relative remunerations, gender pay gaps in paid work, and gaps in work done in households. Our model envelopes existing models of paid sex and marriage as special cases and explains current patterns of declining sexual exchanges while allowing simulation of the effects of different policy interventions.