Explaining Differences in Job Search OutcomesBetween Employed and Unemployed Job Seekers

We use individual data for Great Britain over the period 1992-2009 to compare the probabilitythat employed and unemployed job seekers find a job and the quality of the job they find. Thejob finding rate of unemployed job seekers is 50 percent higher than that of employed jobseekers, and this difference remains even when controlling for differences in observableworker characteristics and job search behaviour. We present evidence suggesting that thesedifferences in the job finding probability is caused by behavioural differences betweenemployed and unemployed job seekers rather than differences in characteristics. Consistentwith search theory, we find that employed job seekers are more selective in evaluating joboffers and are therefore less likely to find a job offer acceptable; for example, they are lesslikely to accept low-wage and temporary jobs, or jobs that do not meet their working hourrequirements....