Youth employment is one of the most pressing socio-economic challenges in many developing and transition economies. In this context, handicraft activities represent an important traditional and modern economic sector that contributes significantly to employment generation, especially among young people. This article examines the theoretical foundations of handicraft activities as a mechanism for ensuring youth employment. It analyzes the economic, social, and educational aspects of handicrafts, their role in promoting entrepreneurship, preserving cultural heritage, and enhancing income generation.