We analyze the impact of imperfect contract enforcement on the emergence of unemployment. In an experimental labor … much higher when third-party contract enforcement is absent. Unemployment is involuntary, being caused by firms' employment …

We present a field experiment to assess the effect of own and peer wage variations on actual work effort of employees … additional real-effort laboratory experiment we show that explicit cost and surplus information that enables to exactly calculate … employer's surplus from the work contract is a crucial prerequisite for a positive wage-effort relation. This demonstrates that …