This study tests the validity of two significant theory of unemployee's mental health. The first theory latent deprivation model proposed by Jahoba argved that paid work provided both manifest and latent functions that associated with financial income and psychological needs respectively. The second theory is the agency restriction model, considered individuals to be ‘socially embedded agents striving for purposeful deter- mination.

Participants were assessed on measures of psychological distress, the latent functions of employment, financial strain, neuroticism and a measure of labour market satisfaction. Results show that latent functions of employment and financial strain were able to contribute to variance of psychological distress. Findings are related to former mentioned theories.