Encouraging young people to get involved in self-employment is a solution that is continuously echoed by policy makers as a way of addressing the perennial problem of youth unemployment. This paper investigates how entrepreneurship can be promoted amongst the youth in South Africa and whether this will alleviate the high unemployment rates. Three questions are put forward: Firstly, what are the main constraints faced by youth when they set up a business? Secondly, what are the main determinants of being self-employed and thirdly, which groups within the youth population need to be targeted by policy makers? The findings are that the major impediment for youths entering self -employment is the lack of financial capital, while having a role model is highly significant in determining whether one becomes self-employed. African and Coloured youth are particularly disadvantaged when it comes to participation in self-employment and should therefore be a primary target for policy makers. The paper also makes a comparison of youth participation in self-employment between 2000 and 2004 and reveals that there is only a slight increase in the numbers of youth getting involved in self-employment. A holistic approach to entrepreneurship development complimented by financial assistance, mentoring and the provision of basic entrepreneurship skills training will assist the youth in moving from unemployment to self-employment.