The purpose of this thesis is to create a deeper understanding of the concepts entrepreneurial climate and youth unemployment as well as estimating the statistical relationship between them. This was realised through a use of multiple methods. A qualitative study that examined the causes and solutions to youth unemployment and one that investigated what factors constitute a good entrepreneurial climate. Some causes of youth unemployment are technological progress, globalisation, labour market regulations, the Swedish education system and the local entrepreneurial climate. Possible solutions to some of these causes are to reform the labour market regulations, incorporate more vocational training in the education system and improve the entrepreneurial climate. Factors that constitute a good entrepreneurial climate are business friendly attitudes, good service by the municipality and good communication between the firms and the municipality. The quantitative study was followed by a quantitative study with the hypothesis that the local entrepreneurial climate and the youth unemployment have a negative relationship in Swedish municipalities. The regression results for both years examined, 2006 and 2009, confirmed the hypothesis. When the local entrepreneurial climate improves, the youth unemployment decreases. An interesting finding is that the goodness of fit, indicated by the adjusted R², almost is twice as large for 2009, when the Swedish economy was in a recession, compared to 2006 when the economy was booming.