Research Summary We studied the effect on social welfare dependence of serving a sentence under electronic monitoring rather than in prison using Danish registry data and two policy shifts that extended the use of electronic monitoring in Denmark. We found that electronic monitoring is less harmful than imprisonment, at least for younger offenders, whereas it does not leave older offenders worse off than imprisonment. Policy Implications As the United States moves toward noncustodial alternatives to imprisonment, policy makers might benefit from knowledge on experiences from other contexts. The experiences from Denmark are clear: Electronic monitoring is less harmful than imprisonment to the life‐course outcomes of offenders. Because electronic monitoring could be less costly for the corrections administrations than imprisonment, efforts to extend the use of electronic monitoring in the United States could be accelerated.