The main research problem in this thesis is how unemployed individuals experience and handle the situation of unemployment and how their actions are related to their action possibilities. These are determined by factors like level of education, vocational training, age, citizenship, handicap and level of unemployment on the local labour market. A common assumption is that search behaviour of unemployed individuals strongly affects their possibility to find a job. A central question in this thesis is if individuals’ behaviour has been overemphasised at the expense of real employment opportunities. The empirical part of this thesis is based on longitudinal data collected during a period of high unemployment. The sample is a national random sample existing of 3 500 Swedes interviewed by telephone in the beginning of 1996 and in the end of 1997. The results show that the expectations of the unemployed to find a job as well as their actual search behaviour are shaped by the situation they are in. The unemployed have job expectations that co-vary with their action possibilities, but as many as 31.3 per cent overestimate their chances and 10.5 per cent underestimate them. This result is based on questions about expectations to obtain a job related to the actual employment situation nearly two years later. Unemployed individuals’ job expectations co-vary with their experiences of the unemployment situation. Those who believe that their job chances are bad have a low mental sense of well-being, while the opposite is found among those who believe that their job chances are good. The sense of having control over the situation is important for an individual’s mental sense of well-being. Both strategies of activity and adaptation occur among the unemployed. Strategies that are meant to change the situation in an objective are most common, only a minority of the unemployed seem to have adapted to the situation of unemployment.