The rationale of this paper is to look into the social and psychological impacts of unemployment on educated youth. Unemployment is devastatingly hitting our youth’s potential and they suffer from socio psychological effects. This research paper highlights chronic impact of unemployment among educated youth. Primary data was collected from a sample of n=100; the age interval of the respondents was (20-31) from Lahore city, Pakistan. The gender distribution was 71% males and 29% females. All participants were educated and unemployed. This research shows that due to unemployment youth is confronting problems such as increasing level of discomfort, contraction in social circle, inferiority complex, hindrance in personal growth, low self-esteem, increasing level of anxiety, unhappiness and mental health problems. Regression analysis shows dependant variables of socio-psychological impacts including level of discomfort, contraction in social circle, social stigmatisation, job search effectiveness, inferiority complex, family goals, unconfident and unhappiness has significant relation with independent variable (unemployment duration)
