Cross‐sectional and longitudinal observations are reported from a questionnaire survey of more than 3000 South Australian school leavers. Questionnaires were administered before the participants had left school and again four years later when they had all left. We were interested in whether there is evidence of a causal connection between unsatisfactory workforce experience and social alienation. On a range of measures related to alienation, we found that those engaged in unsatisfactory jobs and the unemployed responded very differently from those engaged in satisfactory jobs and those who were full‐time tertiary students. However, the dissatisfied employed, but not the unemployed, also displayed greater alienation while they were still at school. We conclude that in young people increased social alienation is a consequence of unemployment, rather than a predisposition towards it, but that high social alienation at school leads to later job dissatisfaction.