This study assessed the impact of steady competitive or noncompetitive employment on nonvocational outcomes for clients with severe mental illness receiving employment services. We conducted a secondary analysis of 2-year data for 187 clients participating in a randomized controlled trial comparing two employment programs. Participants were classified according to 2-year employment outcomes into four groups: steady competitive work, steady noncompetitive work, minimal work, and no work. We compared these groups on 2-year outcomes including symptoms, hospitalizations, quality of life, and social networks. During follow-up, working clients had fewer days of hospitalization than the no-work group. The steady competitive group had greater reduction in negative symptoms than did the no-work group. The steady noncompetitive group showed greater improvement in social networks compared with the other groups. Extended periods of work are associated with improvements in nonvocational outcomes. Beneficial effects may vary according to the type of employment.