Unemployment is viewed as one of the more stressful of life events that an adult can experience. Job loss leads to decreased social status, disrupts family and social roles, produces financial strain, and loss of self esteem, all of which have detrimental consequences for mental health. We studied psychiatric symptoms in 269 unemployed adults with dependent children in Baltimore; one-half of the sample had returned to work 1 year following unemployment. A comparison group of 92 community residents who were continuously employed were also interviewed. Using a stressful life events perspective, we examined three models of how life events relate to psychiatric distress suggested by Dohrenwend and Dohrenwend [1. Social Status and Psychological Disorder: A Causal Inquiry. Wiley, New York, 1969. 2. Am. J. commun. Psychol. 9, 128, 1981]. Our results support an 'additive burden' model of the stress process, which also shows recovery in mental health functioning upon subsequent reemployment. We suggest that the models tested did not take into account the meaning of the life event in terms of failure and that this meaning may influence its impact on psychological distress.