Public expenditure on crime prevention and rehabilitation programmes are typically only considered a cost to the public budgets in Denmark. Expenditure on such programmes can however also be considered an investment, if the programmes have beneficial effects that can be documented through scientific impact evaluations. Cost-benefit-models aim to show whether the beneficial effects of programmes outweigh or at least partially offset the cost of the programmes. Standardized and systematic cost-benefit-models regarding crime exist internationally (e.g. at the Washington Institute of Public Policy), but have until now been unavailable in Denmark.
This has recently changed with an expansion of an existing cost-benefit model, the Socio-Economic Investment Model (Den Socialøkonomiske Investeringsmodel, abbreviated SØM), that now provides cost-benefit-analysis of programmes targeted at inmates. A new report from the Research Division at the Danish Ministry of Justice explains the expansion of SØM and provides examples of cost-benefit-calculations using documented effects of a Swedish and a Finnish programme.
The Socio-Economic Investment Model and its’ recent expansion
SØM is a cost-benefit model that calculates the economic impact of programmes, which increase the share of certain groups of disadvantaged or vulnerable citizens, who reach a certain predefined success criterion, as compared to similar citizens, who do not reach this success criterion.
The Research Division at the Danish Ministry of Justice has recently collaborated with The National Board of Social Services, who are responsible for ongoing development and updates of SØM, to develop SØM and make it possible to perform cost-benefit calculations regarding programmes targeting inmates.
For inmates, the model defines the success criterion as either:
- no new convictions for crime committed in the first two years following release from prison,
- no new prison sentences for crime committed in the first two years following release from prison, or
- participation in work or education for more than half of the first year following release from prison.
SØM includes statistical estimates, of the difference in use of public services and activities between prisoners, who reach one of these success criteria, and prisoners, who do not. SØM converts these estimates to economic terms through estimated average costs for each service and activity.
SØM estimates a positive economic impact of 505.300 DKK after ten years per person, who reaches the abovementioned Goal A, as compared to other persons who do not reach this goal. SØM estimates the positive economic impact of reaching Goal B at 764.000 DKK after ten years per person. Finally, SØM estimates the positive economic impact of reaching Goal C at 556.800 DKK after ten years per person.
It is important to be aware that SØM-calculations include a number of uncertainties and limitations. Importantly, SØM only considers differences in public expenditure, while other potential benefits are not included in the estimates. These limitations mean that the calculations should not be treated as precise and certain results. Rather they serve as indicators of to what extent the programmes should be seen as social investments rather than mere expenditures.
Examples of calculations – the economic consequences of Nordic crime prevention and rehabilitation programmes
The Ministry of Justices’ recent report provides examples of cost-benefit-calculations for specific programmes targeting inmates. The calculations concern effective programmes from Sweden and Finland as no relevant impact evaluations exist in Denmark yet. The calculations show which economic impacts could be expected from similar programmes in Denmark.
In Sweden, Utökad Frigång is an intervention that lets prison inmates serve the last part of their sentence at home with an ankle monitor if they work, attend education or receive treatment. Impact evaluations show that this prevents reoffending. Using SØM, we estimate that the effect leads to a positive economic impact of 47.200 DKK after ten years per participant in the intervention. When the savings from serving the initial sentence at home, rather than in prison are taken into account, the positive economic impact is estimated at 265.100 DKK after ten years per participant.
In Finland, inmates have the possibility of getting a comprehensive education whilst serving their sentence. An impact evaluation shows that inmates, who finish an education whilst serving their sentence, are more likely to be employed or continue their education after their release. Using SØM, we estimate that this effect leads to positive economic impacts of 21.200 DKK per participant after ten years. These calculations do not include expenditure on the education programmes and are a break-even-estimate of what could be spend on the programmes, without leading to a net deficit.
For more information on SØM and the findings of the report, please see the website of the Danish Ministry of Justice (in Danish).
Mikkel Møller Okholm and Malthe Øland Ribe are both Heads of Section at the Research Division at the Danish Ministry of Justice. Both have educational backgrounds in sociology and have worked with criminological topics for a number of years. The Research Division carry out research and analyses on crime developments, the effect of crime preventive measures, and on other topics relevant to the Ministry of Justice.
The projects are decided by the Ministry, but the methodology and the results are politically independent. For any inquiries please contact jm@jm.dk addressing “Forskningskontoret”.