The labour market plays a key role in young people’s position in the social system. Due to the imbalance on the market between the supply and demand of jobs, the level of long-term unemployment is increasing. Young people in the labour market represent one of the most vulnerable groups who have extremely low chances of finding the right employment, despite having high education. There are not many suitable jobs in the labour market, therefore young people often face long-term unemployment, which in many cases prolongs their dependence on family. Long-term unemployment of young people is one of the largest problems in Slovenian labour market, since it causes severe psychosocial issues, often for the rest of their lives. Young people who face long-term unemployment can become excluded from the society due to the negative stigma of unemployment. In my research I decided to use a quantitative method of data analysis, which I applied to the data gathered by a survey. I studied the psychosocial consequences of long-term unemployment on young people. Data suggested that unemployment has an extremely negative impact on young population, their self-esteem and state of well-being. Long-term unemployment was found to lead to negative stigmatization by their family, friends and society, causing their social exclusion.