The relationship between economic change and mental disorder has been examined by several investigators over the past century. The purpose of this paper is to explore this basic relationship and determine its direction in a large Metropolitan area. A time series analysis was undertaken to investigate whether or not unemployment and indicators of mental health are related over time. Trends in the following four indicators of mental health were examined: 1. Number of admissions to all psychiatric facilities serving Metropolitan Toronto. 2. Number of admissions to one provincial psychiatric hospital (Queen Street Mental Health Centre) in Toronto, which serves a chronic population. 3. Number of discharges from Queen Street Mental Health Centre. 4. Number of admissions plus those assessed and not admitted to Queen Street Mental Health Centre. In order to assess the possible delayed effects of unemployment, correlation analyses were computed for several lag times. "Lag time" is defined here as the time delay between unemployment and its potential effects on mental health indicators. Lag times used were zero, three, six and twelve months. The best equation found was for a six month lag, indicating an inverse relationship; as unemployment increases, admissions and discharges decrease. Results suggest that there are no simple relationships between the dependent and independent variables. Observed trends may be due to much wider exogenous factors such as hospital capacity and changing admission criteria.