In Singapore, prostitution is one of the biggest foci of attention right now, next to their worsening economy, technical recession and loss of jobs. This passage appeared in one of their fora. It made an interesting read:
Foreign workers and Singaporeans spend on prostitutes. Money earned by prostitutes if they are Singaporean are saved or spent in Singapore.
If they are foreigners, it is either sent home or spent here (probably both). If it is sent home, agents recieves commissions etc. Money spent here goes to businesses like hotels, restaurants and other services here.
Since foreigners spend their money on prostitutes, their salaries and remunerations are recycled into Singapore's economy. Foreign prostitutes, btw bring down the cost of sex and inflation. If not, foreign and Singaporean men will probably cross the causeway or go to Indonesia and pay not only for sex but for other services as well. With the vibrancy and availability of affordable sex, money otherwise spent on indirect services like food and drinks, hairdressing, gambling, hotel stays, transportation, condoms, healthcare, policing etc remains in Singapore.
We can't see where the money goes to but in a globalised econmy, it really doesn't matter. If one is petty, others will reciprocate. But money will recycle back if they moved overseas.
(Prostitution also prevents more social problems than causing them. If our women have to stay indoors because of fear of sexual crimes, the economy will probably be affected.)
Prostitution definitely stimulates the economy and minimises the effects of recession.