Background The global labour markets have increased the proportion of more ‘flexible’ and less secure employment contracts also in countries with traditional welfare regimes, especially among young individuals. Precarious employment has been shown to be negative for mental health in a number of studies. However, there are few longitudinal studies in the Nordic countries, regarding the health impact of this development. Thus, the aim of our study was to study the impact of a precarious employment situation on mental health in a cohort of Swedish young people.

Methods Postal questionnaires were sent out in 1999/2000 to a random sample of the Scania population 18–80 years of age, Sweden; 58% responded. All of those who responded at baseline were invited to follow-ups after five (2005) and ten years (2010). For this study individuals in the age span of 18–34 years at baseline, who were active in the labour market (employed or seeking job) and had submitted complete data from 1999/2000, 2005, and 2010 on employment precariousness and mental health status, were selected (N = 1135). Employment precariousness was determined based on detailed questions about present employment, previous unemployment, and self-rated risk of future unemployment. Mental health was assessed by GHQ-12.

Results About half of the selected panel had a precarious employment situation at baseline. Labour market trajectories which included precarious employment in1999/2000 or 2005 predicted poor mental health in 2010, RR = 1.4 (95% CI: 1.1–2.0) when excluding all individuals with mental health problems at baseline and adjusting for age, gender, social support, social capital, and economic difficulties in childhood. The population attributable fraction (PAF) regarding poor mental health was 18%.

Conclusions Precarious employment among young individuals is a risk factor for poor mental health, which should be considered in labour market policy formulation and implementation.