The study was examined factors affecting youth’s participation in entrepreneurship activity and poor economic participation of young people that inhibits the country’s economic development and imposes a larger burden on the country due to high dependency of the working population in Holeta town. The study was aimed to conduct in Holeta town on 241conveniently selected youths who had formally graduated from higher institutions and Training and vocational centers, diploma, degree and MA. The data were collected using semi-structured questionnaire. But the analysis was made on 231(95.85%) and it was analyzed by descriptive method using SPSS 21.0 version. As a findings of data collected from respondents in self-administered questionnaire, different variables were identified which affect youth’s participation in entrepreneurship activity i.e .lack of training, entrepreneurial intention, subjective norm, Motivation scale, self-determination, perceived obstacles, financial and credit access. In conclusions, lack of enough training to be entrepreneur, entrepreneurial intention, subjective norm, Motivation scale, self-determination and financial access to credit have significant impact and were crucial factors affecting youth’s participation in entrepreneurship activity in Holeta town. This implies that, youth’s participation in entrepreneurship activity in Holeta town is quite low. Therefore, government bodies and other concerned bodies involved in job creations and small scale enterprise should give high attention or build the mindset of youths toward entrepreneurship development activities, build youths confidence and make them believe in their own ability and potential to create job for self. In addition, stakeholders such as job creation sectors should focus on youths in all endeavors to encourage them in participation of entrepreneurship development activities.
