A study was undertaken to investigate the impact that the· first three months of unemployment has on an individual's levels of self-esteem and self-efficacy expectations. One hundred-twelve recently­ unemployed individuals were assessed on measures of personality, self-esteem, self-efficacy expectations and attitudes and behaviours towards employment and re-employment. Sixty-three of these individuals also filled out a follow-up questionnaire three months later. A significant deterioration in the self-esteem levels of the continuously unemployed was found. In comparison, the self-esteem levels of those who regained employment were maintained. No decrement in self-efficacy expectations was observed for either employed or unemployed individuals.