In the debate about the explanation of socio-economic health inequalities one of the important issues is the relative importance of health selection. The aim of this study was to investigate to what extent occupational class mobility and mobility out of and into employment are health-related, and in addition, to estimate the contribution of health-related social mobility to socio-economic health differences in the working population. Data were taken from the Longitudinal Study on Socio-Economic Health Differences in the Netherlands, which started in 1991; follow-up data were collected in 1995. The analysis is based on 2533 persons aged 15-59 at baseline. The influence of health problems in 1991 (perceived general health, health complaints and chronic conditions) on changes in occupational class between 1991 and 1995 was negligible. Neither upward nor downward mobility was affected by health problems. However, health problems in 1991 were significantly associated with a higher risk of mobility out of employment and a lower risk of mobility into employment in 1995. For example, for mobility out of employment among persons that reported at least one chronic condition in 1991, the odds ratio was 1.46. Health-related mobility out of employment substantially influences the estimate of socio-economic health inequalities in the working population (measured by current occupation). For manual workers, as compared to non-manual workers, the odds ratio for a less-than-good perceived general health was underestimated by 34% in 1995. Selective mobility into employment overestimates socio-economic inequalities in health in the working population by 9%. Respondents that moved into and out of employment were healthier than those that remained economically inactive, but their health was worse than of those that remained employed (both manual and non-manual). Implications for health policy are that the prospects for people with health problems to stay in paid employment should be improved.