The stress system is essential for humans and other organisms to survive. However, when stress is prolonged it can have pathological effects on the brain. To experience long-term unemployment is often stressful, for it has been shown to correlate with depression, low self- esteem, learned helplessness and self-destructive behavior. Long-term unemployment also seems to have physiological consequences, for it has been shown to correlate with cortisol dysregulation. The hippocampus is a highly adaptable part of the brain located in the temporal lobe and is long known for its sensitivity to cortisol dysregulation due to stress. The aim of this thesis is to study how long-term unemployment affects physical and psychological well- being, focusing in particular upon finding out whether it affects the hippocampus. The results suggest that that the kind of stress caused by long-term unemployment is similar to the stress affecting the hippocampus. It thus seems to be a reasonably hypothesis that long-term unemployment has a negative influence upon the brain, and the hippocampus in particular.However, there is an additional issue that one needs to take into account. For some studies have shown that people with poor mental health are more likely to be unemployed. If poor mental health is associated with physiological disorders (including a damaged hippocampus), this implies that not only can long-term unemployment (via stress) affect the hippocampus, but a damaged hippocampus (along with other physiological factors) can increase the probability to become unemployed. This means that the relationship between long-term unemployment and a damaged hippocampus need not be a one-way causal relationship.