We used two studies to examine whether mental health and hostility predicted temporary employment. Study 1 involved a cohort of 970 Finnish hospital employees (102 men, 868 women) who had temporary job contracts at baseline. After adjustment for demographics, organisational tenure and part-time work status, doctor-diagnosed psychiatric disorder predicted continuing in temporary employment instead of receiving a permanent job by the end of the 2-year follow-up. A higher level of hostility was also associated with temporary employment, but only among employees in low socioeconomic positions. In Study 2, anxiety and aggressive behaviour were measured in a cohort of 226 Finnish school children (116 boys, 110 girls) at 8 years of age. Anxiety in childhood predicted temporary employment at age 42. Aggressive behaviour in childhood was related to ongoing temporary employment status in adulthood among individuals in low socioeconomic positions. Our findings suggest that selection by individual characteristics operates between the temporary and permanent workforces. Mental health problems, a part of which are already seen in childhood, seem to restrict individuals' possibilities to gain secure labour market positions. Hostility and aggressiveness seem to be related to labour market prospects only among individuals in low socioeconomic positions.