Young unemployed people in six local communities in Sweden were interviewed to test the assumption that variations in the social and health effects of unemployment could be seen as a function of financial hardship and of experiences of shame. The results indicate that there seems to be a link between the health and social effects of unemployment, on the one hand, and the degree of financial hardship and the number of shaming experiences on the other. The group of unemployed people who suffered a greater degree of financial hardship and also experienced a greater number of shaming experiences seemed to exhibit the poorest health, reported deteriorated health to a greater degree than other groups, experienced negative changes in their lifestyle, did less in their free time, and had lower self-confidence than other unemployed persons. The opposite applied for those who experienced less financial hardship and less pressure in terms of experiences of shaming. Against this background, we have formulated a theoretical model based on financial circumstances and social bonds; a model that could have a wider value in explaining social and health problems.