Work is believed to be important for the mental health of men and women. With limited empirical support, social scientists have argued that employment is important as both an income source and a source of 'extraeconomic' benefits as well. The latter include social status, an interpersonal context, and psychologically rewarding activities. Although jobs in the middle and upper status range appear to be obvious sources of extraeconomic benefits, this is less apparent at the lower margins where jobs are less socially desirable. Drawing on data from TARP, a field experiment involving about 2000 ex-felons released in Texas and Georgia in 1976, a nonrecursive model of the functions of employment was formulated and tested. Using three-stage least squares, employment was found to reduce affective distress among ex-felons by providing both income support and extraeconomic benefits. Furthermore, there were some feedback effects in that affective stress was found to reduce subsequent work activity, further aggravating feelings of displacement and stigmatization among unemployed ex-felons. (Author abstract)