This paper analyses differences between unemployed and employed job seekers in job finding rates and in the quality of the job found. Compared to the unemployed, employed job seekers have a smaller pool of job offers that they consider acceptable; this leads to lower job finding rates but better quality jobs. Differences in job quality are tiny when unobserved heterogeneity and selection into accepting a job are accounted for. Hence, differences are mostly due to behaviour of unemployed people rather than negative signaling or employer discrimination.