There is increasing concern about the health, particularly mental health, of young people and the factors that affect it. Drawing on data from the West of Scotland Twenty-07 Study: Health in the Community, this paper describes the pattern of health in a cohort of about 1000 young people between the ages of 15 and 21, within a context of their experience and expectations of unemployment. Contrary to assumptions of healthiness, high levels of poor physical and mental health were found, with a third of males and two-fifths of females exhibiting evidence of psychological morbidity at age 18. Poorer mental health was strongly linked to the experience of unemployment and being at home, the latter predominantly involving females. This effect was confirmed in multivariate analysis, which controlled for prior health. In addition, an expectation of being unemployed in the future was associated with poorer mental health. For many young people entering the labour market, the prospects of limited employment opportunities and associated risks to health are a major public health concern. In setting their needs firmly on the policy agenda, and planning appropriate services, these broader social issues should not be forgotten.