We analyze the impact of imperfect contract enforcement on the emergence of unemployment. In an experimental labor … observable, but not verifiable to a situation where explicit contracts are feasible. Our main result shows that unemployment is … much higher when third-party contract enforcement is absent. Unemployment is involuntary, being caused by firms' employment …

Right-wing extremism is a serious problem in many societies. A prominent hypothesis states that unemployment plays a … fact a significant positive relation between unemployment and rightwing criminal activities. We show further that the big … difference in right-wing crime between East and West German states can mostly be attributed to differences in unemployment. This …