A significant drop in Victoria's crime rates has been linked to the state's massive expansion of vocational education and training.

While most debate has focused on private training college rorts and cost blow outs, University of Melbourne economists say the benefits of the controversial education reforms have been overlooked.

Letting children off with a warning may underestimate their criminal behaviour, warns the Crime Statistics Agency. Credit:Josh Robenstone

"What has been missing is that these reforms did increase access to publicly funded training and that has had positive flow on effects," report co-author Cain Polidano​ from the Melbourne Institute of Applied Economic and Social Research said.

The paper – A Pathway to the Straight and Narrow – revealed a boost in enrolments was associated with a 12.8 per cent decline in the drug crime rate, an 11.3 per cent drop in property crime and a 4.5 per cent reduction in assaults and other crimes against the person. It compared Victoria to New South Wales, where enrolments remained stable.