We present a two-country labor matching model to account for the existing, inconclusive empirical evidence on the relationship between immigration and crime. According to our model, inflows of relatively un- skilled immigrants negatively affect the labor market equilibrium and, therefore, sharpen criminal activities. On the other hand, inflows of relatively skilled immigrants boost economic activity and reduce the crime rate. Given this preliminary result, we endogenize the migration decision, showing that the host country’ s labor-market characteristics are crucial in determining the impact of migrants on crime rate. Countries characterized by low unemployment rates attract both skilled and unskilled immigrants, making the direction of the relationship between immigration and crime unclear. Countries with high unemployment rates attract only unskilled workers, thus favoring the emergence of a positive relationship between immigration and crime. We test the theoretical predictions of our model on a panel of 97 regions located in 12 European host countries built by combining the European Social Survey and the Eurostat Labor Force Survey. We identify a threshold level of unemployment rate above which the crime rate positively responds to immigration.
