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This study is about the unemployment experiences of unemployed young graduates and their attitudes towards business startups in micro and small enterprises (MSEs) in Wolaita Sodo town, Southern Ethiopia. More specifically, it seeks to examine the job search experiences of unemployed young graduates, examine their unemployment experiences, identify the barriers and opportunities for business startups in MSEs and explore their attitudes towards business startups in MSEs. The work found that unemployment experiences of young graduates varies depending on their gender, marital status, political affiliation and level of education. The study indicated that prolonged unemployment among graduates leads to social exclusion rather than inclusion and wastes the knowledge acquired through a formal education. Besides, the study also examined unemployed young graduate's attitudes towards business startups in MSEs. The outcomes indicate that positive images towards MSEs are mostly hindered by alack of institutional support, lack of training and mentoring, and lack of necessary infrastructures with the existence of just a lip service from concerned bodies among others.