Children of immigrants born in the host country-the second generation (G2)-face higher risks of unemployment and overqualification compared to the majority native population in Western Europe. While the health effects of unemployment and overqualification are well documented, it remains unclear whether these factors impact the mental health of the G2 in the same way as in the majority population. This study uses Swedish register data to examine the association between different labor market disadvantages, i.e., unemployment and overqualification, and mental health outcomes among the G2 and the majority population. The outcome was measured as time to the first prescription of psychotropic medications (anxiolytics, sedatives, hypnotics, and antidepressants). Descriptive findings showed that psychotropic prescription rates are higher among G2 groups compared to the majority population. Cox proportional hazards models, adjusted for demographic and socioeconomic factors, indicated that unemployment similarly impacts mental health across origin groups, suggesting that being unemployed does not contribute to the mental health inequality between the G2 and the majority population. G2 individuals, especially G2 European individuals, showed higher risks of psychotropic prescriptions across all employment types. These findings imply that improving the labor market position is not sufficient to address mental health inequalities between the G2 and the majority population.
