Crime and labor market policy in Europe

This paper analyzes the effects of labor market policy on several types of criminal offenses among nine European countries. The primary results are as follows. First, a higher benefit replacement rate reduces criminal activities. Second, with the exception of assault, active labor market policy has no significant effect on the criminal offenses considered. Third, an increase in the average educational level of the working age population reduces the propensity to commit crime; however, more often than not, the significance level is insufficient. The results suggest that the combination of a high replacement rate with short duration, which mitigates the effects of unemployment in the Nordic countries, is not contradictory to a crime reduction policy.