Contrary to Sweden, Germany introduced a more liberal prostitution law in 2002. Today, prostitution in Germany is regulated by law and regarded as a regular job subject to tax payment and retirement schemes (Di Nicola et al., 2005). Prior to 2002, Germany only allowed individual, self-employed prostitution without third-party involvement. Having a liberal prostitution regime, Germany is known to have one of the largest prostitution markets in Europe, with about 150,000 people working as prostitutes (Global report data used in Danailova-Trainor and Belser (2006)). This means that the number of prostitutes in Germany is more than 60 times that of Sweden, while having a population (82 million inhabitants) less than 10 times larger. In terms of human trafficking victims, the ILO estimated the stock of victims in Germany in 2004 to be approximately 32,800about 62 times more than in Sweden (Danailova-Trainor & Belser, 2006). Again, the share of trafficked individuals among all prostitutes appears to be quite similar in both countries, corroborating the view that any compositional differences across prohibitionist and legalized prostitution regimes are likely to be small. Additionally, Di Nicola et al. (2005) provide annual estimates of trafficking victims used for sexual exploitation in Germany over the 19962003 period, which can shed some light on the changing number of trafficked prostitutes. The estimates show that the number of victims gradually declined during 199697, the first years of data collection, and 2001, when the minimum estimate was 9,870 and the maximum 19,740. However, this number increased upon fully legalizing prostitution in 2002, as well as in 2003, rising to 11,08022,160 and 12,35024,700, respectively. This is consistent with our result from the quantitative analysis indicating a positive correlation between the legal status of prostitution and inward trafficking.