We present a two-country equilibrium model with search costs in which the structural characteristics of the labor market in each economy affects the relationship between immigration and crime. The main result of the model is that countries with flexible labor markets are likely to see a negative relationship between immigration and crime. By combining data from the European Social Survey with the OECD Employment Protection Index, we find supporting evidence in favor of this theoretical prediction. A policy implication of our study is that migration from a country with a rigid labor market to a country with a more flexible labor market is mutually beneficial in terms of reducing crime rates.
