Youth employment in Europe as well as in Croatia presents to be a substantial issue. Service learning fosters a strong relationship with community engagement offering hands-on experience. In this way, it may potentially prepare graduates from higher education institutions for an easier transition into the labor market. As to be able to address the question of whether service learning influences youth employment in Croatia, a study was conducted on 291 participants. The purpose of the research was to strengthen the links between service learning and youth employment in (social) enterprises. Methods applied two separate surveys, covering the topic of service learning and social entrepreneurship and youth, and the research was conducted from February to August 2021. The main findings point to the partial influence of service learning on youth employment in Croatia. Although it provides community engagement by introducing some hands-on experience, these skills and knowledge are still insufficient for the graduates’ competitiveness on the labor market. In order to increase the impact of service learning on youth employment in Croatia, some service learning-related enhancements are proposed but, more importantly, reforms are needed in the (higher) education system in general as well as in the strategic framework on the social entrepreneurship.