This study investigated factors leading to employment and unemployment for young people living in urban and rural areas in Scotland. Surveys and interviews were conducted with 817 youths, 40 rural employers, and 25 professionals from across Scotland. Findings include: (1) long-term youth unemployment was less common in rural than in urban areas, but rural labor markets were characterized by low skilled and insecure employment, with low demand for qualified workers; (2) with rural employment being concentrated in small firms, opportunities for young people to upgrade their skills were limited; (3) many rural employers had a poor knowledge of the New Deal, and even those who were aware of the program frequently were unable to meet minimum training requirements or provide access to external training; (4) poor or costly transport frequently restricted young people's employment opportunities; (5) social networks facilitated access to job opportunities for those young people with good local contacts, while lack of social networks was an important barrier to employment; (6) although female workers were often in high demand in tourist-related services, those with children frequently lacked access to childcare facilities; and (7) a shortage of affordable housing restricted the labor mobility of young people and caused difficulties for those who wished to remain within their local area. Appendices present quantitative methods, people interviewed, and regression variables. (Contains 18 references.) (TD)